The EUR/USD pair has been rather stagnant during the trading session on Tuesday, initially going sideways and then dipping towards the 1.1720 level. I think that the 1.17 level continues to be very supportive, so I am looking for buying opportunities. However, there are a lot of concerns about the inability of the Germans to form a coalition government. This of course has a lot of negativity when it comes to the Euro itself, as Germany as such a large player in the European Union. I suspect that eventually we will get some clarity, so it’s likely that we will be able to place a longer-term trade relatively soon. However, in the meantime I think it’s likely that we will continue to move based purely on technical moves. If we bounce from the 1.17 level, I think that we will eventually go to the 1.18 handle. Alternately, if we break above the 1.1750 level, the market probably goes there as well.
On the other hand, if we break down below the 1.1675 handle, it’s likely that we drop down to the 1.16 handle underneath, and then a move below there would of course in this market even lower, perhaps to the 1.15 level, a psychologically important handle. News flow will highly influence here, but we also have the Federal Reserve looking a raise interest rates so that can put more downward pressure here as well.
Overall, I think that we are going to see a lot of choppiness between now and the end of the year, especially as we get closer to the holidays. Speaking of which, Thanksgiving is on Thursday, and it’s likely that the liquidity may dry up a bit over the next several sessions. That may keep this market reasonably quiet.
Written by FX Empire