The EUR/USD pair rose during the session on Tuesday as the US dollar got absolutely pummeled against most currencies. We have now broken above the 1.33 handle, and as such we are comfortable going long for the short term. The next 100 pips or so should be in the favor of the Euro, and as a result we are jumping along that bandwagon. Whether or not we can get above the 1.35 level might be a different story though, and as a result of that, we are considering is a short-term trade, not necessarily a long-term one.
There have been comments during the session out of various ECB members that interest rate policy can change in Europe, so having said that there is the possibility that the pair will fall sooner or later, not to mention the fact that we are coming towards a dissenting trend line that is somewhat significant. Whether or not we can break above that is another question altogether, and with the volatility that we’ve seen for some time now, although the Euro has been very strong we are a bit hesitant to stay in any trade for a significant amount of time at this point as the markets have simply gone back and forth on the whims and comments of various players around the world.
If we move back below the 1.32 handle however, we would be sellers at that point as we would more than likely return to the previous consolidation zone going down all the way to 1.28 or so. 1.30 will be a significant support area as well, so that of course could come back into play. At this moment time though we do feel that this will be more of a grind higher and unless of a straight shot up. Going forward, we expect to see this market go back and forth over the course of the summer, and will more than likely shake a lot of traders out of the marketplace. The Euros still has to worry about headlines coming out of the continent, but at this moment time things are fairly quiet which is always good.
Written by FX Empire