The EUR/USD pair fell during the majority of the session on Wednesday, as we continue to pressure the 1.370 handle. However, we do get enough of a bounce towards the end of the day to turn things back around and form a hammer, which of course is a very supportive sign. With the recent action being what it has been, I feel that the market will more than likely continue to pressure the 1.37 handle, but I have to admit it has been rather stubborn. Because of this, it’s very possible that the market may turn things back around and bounce from here. However, I believe that’s more than likely going to be a bit of a short-term bounce, and now much more than that.
Looking at the overall charts, I cannot help but feel that we may be trying to dig out a summer range at this point. The 1.37 level might be the bottom, while the 1.40 level will most certainly be very resistive. The European Central Bank has no interest in the Euro being above the 1.40 level, and has quite frankly been very aggressive about talking down the value of the Euro as recently as yesterday.
Tightened ranges.
This pair has had tightened ranges for some time now. Quite frankly, it’s not anywhere near as easy to trade as it once was. With that being the case, I feel that this market will continue to be choppy, and IEM not going to be surprised at all if the aforementioned summer range comes true. However, if we break below the bottom of the hammer from a couple of days ago, and the one from Wednesday, I think we could fall as low as 1.35. However, I believe that the 1.35 level is the absolute bottom of the market right now, and that being the case I would be more than willing to buy down at that area on the first signs of support. At the very most we might be talking about a 500 PIP range for the summer between the 1.35 and the 1.40 handles, but truthfully I still believe that 1.37 could very well hold.
