The US dollar has been very noisy during the trading session on Monday, as we continue to test the 107.50 level above. If we can break above there, the markets likely to continue to go much higher, but keep in mind that this pair is highly sensitive to risk appetite in general. I believe the pullbacks offer value, but you’re going to need to be very cautious about this pair as it does tend to be very noisy. The 107.50 level has been a major resistance barrier in the past, so breaking above there with any type of significance would be a very good sign. This would coincide with stock markets rallying, and of course a lot of fear leave in the marketplace when it comes to things like Syria and the potential of a trade war between the United States and China.
If we do get bad news, this market will probably break down below the uptrend line and grind down to the 106.50 level. Ultimately, this is a market that will be very noisy, but that’s typical for this pair. If we break above the recent high, it’s likely that we will continue to go towards the 108 handle, and a break above there should send the market to the 110 handle after that. I have no interest in shorting this market, least not right now. However, if headlines warrant it, shorting could be possible.
Written by FX Empire