The EUR/USD pair tried to rally during the course of the day on Tuesday, but continues to show trouble right around the 1.14 level. This is an area that sees quite a bit of resistance, and as a result we turned back around to form a shooting star. That is not a big surprise in my opinion though, because quite frankly this is a very choppy market. I see quite a bit of resistance between the 1.14 level and the 1.15 handle, as the 1.15 level turned the market around yet again. With this being the case, and looking at the longer-term charts, I still believe that the 1.15 level is crucial, and a break above there would be an extraordinarily bullish sign. At that point in time, I would assume this market has changed its trend, and that would signal that buying is the only thing that can be done over the longer term.
Ascending triangle
The uptrend line below is the bottom of an ascending triangle that has been in this market for some time now, and is especially obvious on the weekly chart. With that, I believe that anytime we fall it’s only a matter of time before the buyers get involved again. It is not until we break down below the blue uptrend line that I would consider selling for any real length of time, although I freely admit that a break down below the lows on Monday might be a short-term selling opportunity. I think that somewhere near the 1.12 level however, we will find quite a bit of support and the market will turn itself back around.
As for myself, I am actually not trading this market at all until we get above the 1.15 level. Simply put, there are much easier markets to trade out there at the moment but I do recognize that a lot of you want to be involved. With this, I think short-term traders will sell this market, but they will have to take profits quickly.
