The EUR/USD pair of course fell during the beginning of the session on Thursday, but as we have seen more than once, the 1.36 level offered support. That being the case, I feel that the market is probably going to go higher in the short-term, but quite frankly this is nothing to write home about. The move higher will more than likely struggle to gain momentum though, as the 1.38 level has been so resistive. On top of that, I feel that longer-term charts need to be looked at in order to appreciate exactly what’s going on in this pair.
The 1.38 level is the beginning of significant resistance, but as you can see in the very top of the chart attached, there is a trend line that’s going lower that seems to dissect this market just above. That is a trend line from a monthly chart, and obviously means a lot. Because of this, I am very hesitant to go long of this pair at the moment, but quite frankly there’s far too much in the way of support as well, so this is going to continue to be a short-term choppy market.
“Dead money waiting to happen.”
As far as I can tell, this money is essentially “dead money waiting to happen.” The reason I say this is that there are so many different areas they can cause this market to move, we really don’t have a whole lot in the way for trades to gain any real traction over the longer term. I believe that for the next several months, this is going to be the theme of this pair. However, eventually the European Central Bank is more than likely going to have to loosen its monetary policy, and that could in fact send this pair much lower. However, I don’t think that’s going to happen anytime soon, and although longer-term I think there’s more of a negative bias to this pair, at the moment it feels more like a market that’s ready to stand still and go sideways.
