The EUR/USD pair fell like everything else. Measured in US dollars during the session on Thursday. However, we did see a bit of support near the 1.32 handle, causing a bit of a bounce by the end of the session. In the end, the market still looks fairly weak, but it does appear that the 1.32 level will offer enough support to at least keep the market within the previous trading zone.
On the chart, I have a weekly trend line that has been sending for some time now, and you can see it is presently near the 1.34 handle. Is because of this that I feel that this market is going to consolidate between here and there, but in the end we will more than likely see the market break down over time. This is simply because of the two different attitudes of the central banks right now. On one hand, you have the European Central Bank, which is probably going to have to do something to stimulate the economy going forward there. On the other hand, you have the Federal Reserve which now is openly talking about possibly exiting the quantitative easing game. In other words, the interest rates in the United States should continue to climb from here on out, which is always one of the best things for a currency.
Playing the range for the short term.
Even though I feel that this pair will eventually fall, I do also recognize the fact that we could find ourselves in a range for longer than anticipated. After all, it seems like a matter what happens they just won't kill off the Euro. Because of this, I think that we could be settling into a summer range fairly soon, and this area would probably serve just about as well as any other one. Because of this, I think I will have to play this from the shorter-term perspective, but I have to admit I do prefer selling this pair at the moment than buying it. That being the case, I will be looking to fade rallies as they appear.
