The EUR/USD pair went back and forth during the session on Wednesday, as the market continues to sit at the 1.13 level. This area looks like it is going to be support for the short-term consolidation range. The 1.15 level above is resistance, and with that I think that the sellers will come back in at that point. Ultimately, I think that we are going to be range bound for the next several sessions as the market decide what to do next. After all, we just recently had the jobs number come out stronger than anticipated, and even though it didn’t really move this pair drastically, it gives is a lot to think about as the United States certainly is doing better than Europe at the moment.
Ultimately though, I believe that the long-term downtrend will take over again and we should then head to the 1.10 level. That is an area where I would anticipate to see a significant amount of support, and I would anticipate another bounce at that point in time but I also recognize that as a target.
I continue to sell rallies
Although I can make an argument for buying a slight bounce in this general vicinity, I think that is going to be easier to simply sell rallies as they appear. After all, if you are patient you typically will get the set up you are looking for. I believe that the 1.15 level is simply a significant amount of resistance all the way up to the 1.1650 handle, and after that the 1.18 level.
In fact, I don’t feel comfortable buying the Euro until we are above the 1.20 level, which would be a massive shift in thinking at the moment. Because of this, I think we have further to go to the downside but it could be a bit choppy in the short-term. It’s only a matter of time before the market does break down after all, but you are going to have to be able to hang on through the volatility of short-term range bound trading.
