The Euro broke down significantly during the trading session on Friday, reaching down towards the 50 day EMA, and perhaps even more importantly the 1.09 level. Ultimately, this is a market that continues to see a lot of noise, as we have gone back and forth. The 1.10 level above has been massive resistance, while the 1.0750 level has been massive support. That level extends all the way up to the 1.08 handle, as a “support zone.”
EUR/USD Video 25.05.20
All things being equal, the market is very choppy and uncertain, and as a result it is likely that we will continue to see a lot of short-term trading opportunities. At this point, I would be more apt to take profits from the short position yesterday, as we head into the Memorial Day weekend. That being said, simply trading back and forth at these range edges makes sense. I do favor the downside in general, but it should be noted that the previous candlestick for the month was a hammer.
Because of this, breaking down below the 1.0750 level would be a bit difficult to break down through that level, so pay attention to that. If we do break down below that level, it is going to open the floodgates for selling pressure. Ultimately, this is a market that is stuck between these two levels at the moment, so with this in mind it is going to be very choppy to say the least. In general, I believe that the market continues to see volatility as a short-term trading opportunity, but beyond that I think it is a bit difficult to imagine anything more.