The Euro initially tried to rally during the trading session on Wednesday to continue the recovery from Tuesday, but at this point looks like the markets are trying to simply grind sideways in order to figure out where to go next. After all, we had recently hit a major resistance barrier in the form of the 1.23 level, and of course the US dollar had been oversold against almost everything. That should continue to be on the minds of traders, and therefore I think that we are still susceptible to further downward pressure. That being said, there is a massive amount of support near the 1.20 level that extends up to the 1.19 level based upon previous market structure.
EUR/USD Video 14.01.21
To the upside, the 1.23 level extends to the 1.25 level as far as resistance is concerned. It will not surprise me at all if it take several weeks to finally build up the necessary momentum to break above there. Because of this, I believe that we are probably going to be more likely to be choppy and range bound in this pair in the short term than anything else. That is the norm for the Euro anyway, so it should not be much of a surprise. I do not have any interest in shorting, I just recognized that we may continue to pullback in the short term. Pay attention to the US Dollar Index, because it of course will lead the way as the Euro is such a huge portion of that important technical index.
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