The EUR/USD pair went back and forth on Friday, ultimately settling on a slightly negative candle. That being the case, the market should continue to meander around this general vicinity, an area that this market has been attracted to for some time now. I really don’t see much in the way of any significant longer-term moves coming, especially considering this seems to be so much confusion as to what the 2 central banks are going to do that are involved in this pair.
It is obvious to me that the 1.35 level is a massive support level, and a move down below that area should send the market much lower, with a stop at the 1.33 handle. However, I see a significant amount of resistance above at the 1.37 level, an area that will be difficult to break. Between now and then, I just see short-term moves at best, probably of the 20 or 30 pip variety.
I still use this pair as a barometer.
I still use this pair as a barometer of Euro strength or weakness, and use it is a signal as to whether I should be buying that currency or selling it against other currencies. In the meantime, I really don’t like this pair at all as I believe it is been taken over by short-term traders that pass, and probably high frequency traders at worst. In other words, they are basically making this pair as difficult to trade as possible.
If we do break above the 1.37 level, I believe that the market will grind its way to the 1.40 level or somewhere nearby as it was the most recent high on the monthly chart. However, I think it will be a very difficult fight to get back that way, and as a result it probably would be a “buy only” market once we get above the 1.37 level, but more than likely it will be one that focuses on ultra-short-term trades. With that, I believe you could buy and buy again, but will find that the market will be very difficult. As a general rule though, I am trading the Euro against other currencies.