- During trading on Wednesday, we have seen a lot of back and forth trading in the EUR/USD pair.
- What I think is most important to pay attention to here is the fact that we are hanging around the crucial 1.08 level, or perhaps I should say just below it, suggest that we are looking for the market to find the floor in the range that we are trying to set up.
- That being said, it’s probably worth noting that the previous 2 candlesticks are in fact inverted hammers, which of course is not a good look.
With that being said, I think we have a lot of volatility just waiting to happen, but if we were to break down below the lows of the day, then I think you’ve got a shot at the EUR/USD pair dropping to the 1.07 level. In that environment, I suspect that we will have more of a “risk off environment” around the world, and we could start to wrestle with the idea of testing the 200 Day EMA.
Technical Analysis
The technical analysis for this pair is bullish at the moment, but it also is worth noting that the last couple of days have produced a bit of a mixed signal. After all, we have seen the market try to rally a couple of times, but it just doesn’t have the momentum to truly do it. On the other hand, we also seemingly are trying to respect the short-term floor in the market, so I think at this point in time you just have a market that has no idea what to do with itself.
If we do rally, then I don’t necessarily think that it’s a hugely bullish sign, it’s just a sign that we will return to the same consolidation region that we had been in previously. While this is a good sign for the euro, it doesn’t necessarily mean that we are going to take off to the upside and start ripping skyward again. I think you need to watch that bottom, and if we don’t break down below it, we just simply continue to more sideways work, perhaps working off some of the froth.
Ready to trade our daily Forex analysis? We’ve made a list of the best forex demo accounts worth trading with.
