- In the daily Euro analysis, I can see that we initially dropped a bit only to turn around and show signs of life.
- This suggests to me that buyers are willing to jump in and pick up the Euro now, despite the fact that we had a big surprise to the upside in GDP numbers coming out of the United States.
- At this point, it's probably worth noting that the Euro tends to go from one big figure to the next.
Right now, we are between 1.08 and 1.09. In fact, we are roughly halfway between the two. So I think the next obvious thing to assume is that we will reach one of those levels sooner rather than later. With that being the case, I like the idea of buying the Euro, but for short-term trade only. I wouldn't necessarily get married to this position.
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The 1.09 level will more likely than not continue to be a significant barrier. And if we do break above there, then we could go as high as 1.0950, which was the most recent swing high. This time of year does tend to be rather choppy and sideways. So do keep that in the back of your mind. But ultimately this is a market that I think is probably also best used as a tertiary indicator in the sense that it can give you an idea as to what the US dollar may or may not do overall.
The Purpose of this Pair for Me
You can use that information to trade other currency pairs. In fact, that's most of what I use the EUR/USD pair for because it just doesn't move very cleanly most of the time. If we were to break down from here, the 1.08 level should be an area of significant support and the 1.08 level underneath of course is an area that is previous support and resistance, so I think you'd probably have some value hunters jumping into that area. All things being equal, I believe that we have short term positivity, but overall, this is a very neutral pair.
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