The EUR/USD pair initially rallied during the day on Monday but ran into trouble near the 1.2340 level. The market rolled over and reach back towards the 1.23 level, and I think that it is likely to continue to chop around in very tight trading as major US numbers come out over the next couple of days. Ultimately, I think that this market does go higher, but we will probably be hard-pressed to find traders willing to put a lot of risk on in a market that could violently move against them. Because of this, I think that it’s probably best to avoid trading this pair with a large position in the near term, and I think that we may drift a little bit lower before finding enough buying pressure underneath.
I anticipate that the 1.21 level continues to be the floor in the market, and if we can stay above there I think there will be plenty of traders out there willing to put money to work. Ultimately, this is a market that I think will go looking towards the 1.25 level above, an area that has been important more than once. If we can break above the 1.25 handle, then the market is free to continue the longer-term move towards 1.32 that I have been talking about lately here at FX Empire. Expect volatility once we get the announcements out of the way, meaning that the later part of this week should be interesting.
Written by FX Empire