By: Christopher Lewis
The EUR/USD has been rather unimpressive all things considered. It was just a couple of sessions ago when Federal Reserve Chairman Ben Bernanke stated that the interest rate in America would remain as low as possible, for a long as possible. This of course got the market selling Dollars on Monday, but the reaction since then has been quite frankly – limp at best.
The move was sudden and sharp when Mr. Bernanke made those comments, and even reversed what had been a negative day in this pair. However, since then we have seen nothing but a malaise in this pair. While it hasn’t been massively bearish – the very fact that it cannot gain traction suggests underlying weakness, and to me has been very telling.
1.3250 And Beyond….
The 1.3250 level just below the current market price to me is one of the key levels. But leaving that alone for a minute, I can only say how unimpressed I have been with the Euro lately. Because of this, I know I want to sell. However, as with all things in trading – it comes down to timing.
The 1.35 level above is a strong resistance area, and if this pair rises in value I am going to look for weakness at that mark. The pair will have to close well above that level in order for me to be a buyer; I just see far too many problems in Europe to get excited about owning the Euro.
.png "EUR/USD Daily 3/29/12")
The 1.3250 level just below should in theory be support at this point. It was resistance recently, and now that we broke above it, it should turn into support. It is because of this that I would be willing to sell this pair based upon a break and close below that level. I know that given a choice, I would rather sell form 1.35, but with the recent lack of enthusiasm in this pair, we may not get a chance to do that.
All around though, I think this pair stays somewhat range bound as the 1.30 level below looks supportive, and the Euro seems to always find a way to hang on overall.