The Euro initially tried to rally for the week, only to turn around and show signs of weakness. Ultimately, the question now is whether or not we continue to go to the downside, reaching towards the 1.20 handle? If we do, then there might be a nice short-term selling opportunity but at the end of the day it is likely that we would see more choppy behavior than anything else as this pair is notorious for doing, and of course we have to worry about the fact that the summertime trading tends to be very noisy and essentially rudderless as well. With that in mind, I like the idea of buying down at the 1.20 handle, but as far as up here, I am not overly sure due to the fact that there is obviously a significant amount of resistance just above.
EUR/USD Video 14.05.21
When you look at the chart, you could make an argument that we have seen a little bit of a range recently, but there is obvious resistance above at the 1.23 handle that I think is going to be very difficult to take out. If we can, then the market would go looking towards 1.25 level which is major on longer-term charts, but I just do not see it happening in this type of environment. With that in mind, I think you are looking at more or less range bound trading with a slightly negative tilt, with the keyword in that phrase being “lightly.”
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