The EUR/USD pair had a strong showing during the session on Wednesday, as the market continues to bounce around in the consolidation area that we have seen for some time. The 1.28 level on the bottom represents the support, and the 1.30 level on the upside represents the resistance. We feel that this market should continue to grind around in this area, and that more than likely we will see a break above the 1.30 handle before we see a significant breakdown in this market.
A move above the 1.30 level offers the opportunity for this market to go as high as 1.32 in the short term as it is the top of that consolidation area. We feel that this market is actually consolidating between 1.32 and the 1.28 handle, but that the 1.30 level is the “fair price” of this market. Because of this, all three of those levels offer support and resistance, so we feel that at this moment in time the market is simply grinding sideways and that we are probably more buyers to the downside today as the market has risen so much in the short amount of time.
We still feel that this market really isn’t going to go anywhere over the summer, and it should be stated that the 1.28 level below is the beginning of a massive amount of support going forward, and because of this it could be very difficult to break this market down for anything of significant. We could be very well setting up the summer range, and at this point in time we feel that’s exactly what’s going on. Granted, we could break into that upper level, but at the end of the day it’s all one big 400 pip range that the market seems to be stuck in.
Quite frankly, if the Euro hasn’t collapsed yet, it’s hard to think of a reason why would start to do so now. There have been plenty of reasons for the Euro to lose value significantly, and it still hasn’t been able to.
Written by FX Empire