The Euro has fallen rather hard during the course of the week, wiping out several handles. This of course is a very negative sign but at this point in time the “easy money” has been made. At this point, we are sitting on top of significant support just above the 1.18 level, and as a result it is something that we have to be very cautious with. Longer-term traders missed the move would be my guess, but I do not think that chasing this trade makes a lot of sense at this point. Quite frankly, this is a market that is on the precipice of making a bigger move and for what it is worth we have not made a “lower low” either.
EUR/USD Video 21.05.21
I think this is the beginning of a huge range bound trade, because I have seen this behavior in the Euro before. Quite frankly, it would not surprise me at all to see this market chop back and forth wildly during the summertime. At this juncture, we have not made that “lower low” that would have the sellers coming in for a longer-term move, and quite frankly I think there is plenty of support just below to keep this market afloat. I know it is an ugly candlestick, but unless we break down below the 1.16 level, I think this is just a new larger range trying to form itself.
What I would use this market for is a potential indication as to how the US dollar is doing. After all, the market is likely to see it as an indicator due to the fact that the Euro is a majority of the US Dollar Index.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire