The EUR/USD pair had a very volatile session on Monday, ultimately showing a bit of bullishness towards the end of the day. Because of this, we still believe that the market breaks above the 1.10 level, that it will end up going higher. There is the so-called “Greek decision day” coming up, but at the end of the day we do not feel that they will do anything to jeopardize their standing in the European Union. With this, we believe that the Euro will rally later this week, but need to see a clearance of the 1.10 level in order to start buying. On the other hand, if we break down below the bottom of the hammer from last week that would be a very bearish sign which should have this market selling off. In fact, it’s very likely that a break down below there would probably have this market looking for the 1.06 level, and then perhaps even as low as the 1.05 level.
On the other hand, if we break above the 1.10 level, we feel that this market will more than likely head to the 1.12 level. We also recognize that the real resistance is closer to the 1.15 handle. If we managed to get above there, the market should change trends completely, and then it will be more or less a “buy and hold” type of market. That does not seem very likely at the moment, but having said that it wasn’t that long ago that we trying to get above that level. Because of this, we believe that eventually we will try to do so, but regardless we would anticipate seeing quite a bit of volatility in the meantime.
In the meantime, we would anticipate seeing this market go between the 1.08 level on the bottom, and the 1.10 level on the top. It is really going to come down to your timeframe, as short-term traders will probably continue to trade back and forth. Ultimately, we will have to make a decision and we will simply follow what the market does want to breaks out of that short-term range.
