The EUR/USD pair has rallied a bit during the day, bouncing from an uptrend line that we have seen on the daily chart. This is important, because it will define whether we stay in the uptrend or not. So far, it looks as if we are starting to see buyers jump into this market but given enough time we will probably see the market go looking towards the 1.20 level if the buyers can continue. Alternately, if we break down below the 1.1850 level, then I think the market goes looking for the 1.1750 level, and then possibly even the 1.15 level after that. This being said, I expect you will see a lot of noise, and I think that the next couple of sessions will probably be extraordinarily volatile. Because of this, small positions will probably be necessary, but I suspect that looking at the short-term charts will probably be the best way to trade in the meantime.
I believe that being patient is probably what it will take to make money in this market, but even with the selloff that we had seen during the session on Wednesday, we are still technically in an uptrend so until we break down below the uptrend line, I would have to say that I’m probably more comfortable with long positions. However, if the market tells me that it’s time to start selling, then I will not hesitate to do so because certainly I am not going to be fighting that type of move as it would show a significant change of attitude. I think that it is going to be difficult to break above the 1.20 level though, so I’m not looking for that to happen in the short term. Ultimately, volatility is here to stay.
Written by FX Empire