The EUR/USD pair went back and forth during the session on Tuesday, but as you can see formed a relatively neutral candle. What’s interesting about this is the fact that it is after a significant breakout, in this suggests typically that there is enough of a question by the sellers to let this market continue to rise. Because of this, we feel that a break of the highs for the session on Monday should signify that this market is going to try and chase the 1.32 level.
We also expect the 1.30 level to be supportive, and because of this we are more than willing to buy dips that show signs of support below it isn’t until we close well below the 1.30 level that we would consider selling, and as a result this is a “one-way trade” at the moment. However, we think that the upside is somewhat limited and that we are simply bouncing around in the larger consolidation zone that we’ve been talking about for some time now.
The European Union seems to have faded out of the spotlight recently, and any time that happens the Euro seems to do fairly well. There of course is always the possibility that some headline comes out they could bring everything back down, but at this point time it appears that the markets are fairly stable when it comes to the European debt crisis.
That being the case, we believe that this market continues higher, and would use short term charts to recognize pullbacks that show signs of support. The supportive candles should be thought of as buying opportunities, and as a result we will be buying ourselves. If we do manage to somehow get above the 1.32 level, that would be an extraordinarily bullish sign for the Euro. If that happens, this market will more than likely explode to the upside yet again.
Going forward, we expect choppy conditions. It is because of this that you must be very diligent about placing stops and patient about waiting for the trades to work out in your favor.
Written by FX Empire