The Euro has rallied significantly during the trading session on Tuesday, breaking above the top of the candlestick from the previous session on Monday. At this point, it’s a good reversal but when you look at the chart you can recognize that the market is struggling with the 1.09 level midday. At this point, the Euro is going to be all over the place, and it looks like we are trying to figure out a longer-term direction. After all, we have started to tighten the market in general, as there was a huge swing all the way up to the 1.15 handle, before breaking down towards the 1.06 level, and then swinging back to the 1.1150 level before dropping down to the 1.08 area, where we have just bounced from.
EUR/USD Video 08.04.20
At this point, the market is starting to constrict, so the question is twofold: “Are we trying to build up enough momentum to make a massive move in one direction or the other, or is the market trying to calm itself back down and go back to the chopping sideways action that the Euro is known for?” At this point, it is a little bit difficult to discern that, but I would suspect that the market may actually calm down a bit. That probably favors the downside longer-term, but that is more of a longer-term type of situation. Overall, this is a market that is trying to make its mind up right now, so if we break above the top of the candlestick from the candlestick from Tuesday, I believe that the top is closer to the 1.10 level. If the market rolls over, the 1.08 level should offer support.
This article was originally posted on FX Empire
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