The EUR/USD pair fell during the session on Monday, in reaction to the Russian invasion of the Crimean peninsula. This is essentially a “risk off” type of day, and with the European indices crashing fairly hard all across the continent, it makes sense that the Euro would suffer. That being the case, it became a bit of a “self-fulfilling prophecy”, as the 1.38 level has been so significant. If you have read any of my recent articles, you know I have referred to this level as one of the most important levels on this chart.
On top of that, there is a trend line that runs through at roughly 1.39, which is the top of the down trending channel from the monthly chart. In fact, this channel started at the height of the financial crisis, so it is in fact a very significant piece of technical analysis to pay attention to.
More headaches for EUR/USD traders
All that being said, I believe that the market does have a little bit of the downside bias to it right now. However, I see a significant amount of support at 1.3650 level, and it will take some type of serious selling pressure to push the market lower than that level. With all that being said, I believe that the market continues to chop around over the course of the next several sessions, especially as the world awaits to find out what the Russians and the Ukrainians are going to do.
Ultimately, I believe that situation will come down, and we will get back to “regular Forex trading.” Biggest problem with that of course is the fact that the market seems a little bit confused overall, and I now feel that a break above the 1.39 level would be massive in its implications, even though I find it very unlikely. I’m afraid that we are going to see a continuation of the choppiness that we have seen for so long now. That being the case, I am not risking any serious amount of money in this market presently.
