The EUR/USD pair had a slightly positive session on Thursday, as the 1.30 level did in fact offer support as we had suggested. The candle was and exactly impressive, but it does suggest that perhaps there is a little bit of a bounce coming from this area.
If you look back for the month of April, you can see that the 1.30 level was the bottom of the consolidation area going up to the 1.32 level, and we believe that possibly this market could try to reach that 1.32 handle again. However, we would expect resistance to come back into play in the general vicinity, and perhaps offer a nice shorting opportunity.
The biggest problem we have with this chart right now is that there is far too much support just below the 1.30 handle in order to feel comfortable selling that being the case, is very difficult for us to imagine shorting this market even though technically breaking the lows of the Wednesday session would be a decent sell signal.
With all of the choppiness that we have seen in this market for the last several months, we can only expect more. After all, this is one of the most headline driven Forex markets out there, and it’s obvious to us that the markets are focusing on the latest statement by the Federal Reserve, or perhaps the European Central Bank. Either way, a simple few choice words during the session could change the outlook of any particular trading day in a blink of an eye.
Is because of this that we actually don’t like trading this market at all right now. However, having said that we would expect the risk to be to the upside over the next several sessions, and it should be noted that the US Dollar Index formed a shooting star for the session on Thursday as well, which signals that the US dollar may be taking a little bit of a breather. If that’s the case, we would make perfect sense to see this market go back to the 1.32 handle.
Written by FX Empire