By: DailyForex.com
The EUR/USD pair had a positive session on Monday, but gave back a little bit of the gains late in the day. We are currently at the top of what I think is going to be consolidation between the 1.3150 and 1.28 levels. With this being said, there are plenty of headline risks out of the European Union right now, and as such I am very leery of owning the Euro against the US dollar, which of course is the ultimate "safe haven asset."
Looking at the charts, I see a lot of noise above 1.30 and extending all the way to the 1.35 level. However, that does not mean the market can go higher. In fact, I think it will more than likely attempt it, but we need to be patient if we were to go long because of all of the noise and resistance above. Is because of this that this pair is rapidly becoming one I'm not interested in at the moment. Quite simply put, there will be easier trade out there. (A perfect example is the article and video I did today for the EUR/JPY pair.)
Pick your battles
This isn't necessarily a call that the Euro won't be able to break through the 1.35 level, as I am very aware the fact that it continues to rise no matter what I think about it! But the truth is that you need to pick trades that are easy, or at least have an easy route to your target. I simply do not see that in this marketplace, and there is nothing on the chart that suggests I will soon.
The 1.28 level below however is much more interesting to me. If we managed to break below it, that would be an extraordinarily bearish sign and I think we would head back down to the 1.25 level in relatively short order. Once we get below that, 1.20 is in the picture as well, but there is quite a bit of noise below the 1.25 area that could make it a very choppy move. Because of this, I want to take the easy trade - selling this pair below 1.28, which of course I can’t do at the moment.
