By: DailyForex.com

The EUR/USD pair fell during the bulk of the session on Wednesday, but as you can see we ended up finding a significant amount of support below the 1.3350 level, and bounce far enough to form a hammer. This hammer of course is very good-looking as it is not only a perfect shape, but it is at the very end of a massive move lower. Because of that, it appears that we could get a little bit of a bounce, and quite frankly that wouldn’t be a surprise as we are getting fairly close to the 1.33 handle, an area that I see as massively supportive.

Biggest problem of course is that the 1.35 handle above it should be massively resistive as it was a significant break down at that level. With this, I think that we have a short-term reprieve for the Euro, but ultimately the sellers will come back into the marketplace in that region if we get there, and we could in effect have a “two speed” signal. We might ultimately be able to go along in this market for the short term, and then turn around and sell once we get closer to the 1.35 handle.

Volatility should continue.

With very little out there to move the market in any one definite direction, it’s hard to imagine that we will continue to have very choppy conditions. Even with a massive selloff that we have seen over the last several weeks, you can still see where the market was choppy all the way down. I don’t think of this market’s going to be any different in the near term, and as a result I feel that we will more than likely have short-term trade setups only at this point.

If we did break below the 1.33 handle, I think this pair goes to the 1.30 handle next, but think that is going to take some serious selling pressure in order to achieve that breakdown. As far as buying is concerned, I suppose if we get above the 1.3550 level, I would be forced to start buying and aiming for the 1.37 handle.

EURUSD 8714

Related Articles
  1. Mutual Funds & ETFs

    3 Morgan Stanley Funds Rated 5 Stars by Morningstar

    Discover the three best mutual funds administered and managed by Morgan Stanley that received five-star overall ratings from Morningstar.
  2. Economics

    4 Countries Pleading for Higher Commodity Prices

    Discover what countries are struggling the most from the price collapse in commodities and what these countries require to return to economic growth.
  3. Stock Analysis

    The Top 5 Gold Penny Stocks for 2016

    Discover five penny stock gold miners that are well-positioned to profit in 2016, providing opportunities for investors to make significant gains.
  4. Economics

    3 Reasons Iran is Important in 2016

    Learn about how the global economy and Iran will be affected by the recently lifted trade embargo and sanctions from Iran, and what it means for 2016.
  5. Sectors

    3 Cyclical Industries To Exploit in 2016

    Learn about the three industries at the down end of their business cycles, and discover how these industries may improve in years to come.
  6. Mutual Funds & ETFs

    Top 3 Voya Funds for Retirement Diversification in 2016

    Learn about Voya Investment Management's mutual fund offerings and the three Voya funds to consider for retirement diversification in 2016.
  7. Retirement

    5 Reasons Americans Retire Abroad

    From better weather to a cheaper cost of living, here are 5 reasons to make the move.
  8. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  9. Budgeting

    Blue Apron Review: Is It Worth It?

    Read about one of the top meal-kit delivery services in the United States, and learn more about what it offers and how much it costs.
  10. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  5. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  6. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center