- The Euro did rally a bit during the early hours on Monday, but we are starting to see a little bit of heaviness in this market at the moment.
- That being said, we still have a long way to go before we can talk about being bearish.
- However, we are in a situation where traders are definitely worried about the 1.15 level and whether or not we can break above it.
We've recently seen volume spike, drop, and then spike again. When looking at certain oscillators, you can also see divergence. I believe that we may be a little tired at this point and could see a bit of a breakdown. At the same time, I could make the argument that the market is simply going to kill time after this massive run higher. After all, it's not typical for this pair to move that quickly.
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Normal Behavior of Grinding Here
This is a market that generally grinds its way in one direction or the other, often putting traders to sleep. The fact that we had such an impulsive move is a little out of the ordinary. Looking at the longer-term chart, you can see there is a major cluster right here, so it makes sense that we are repeating that pattern.
We had a range from the end of 2022 between 1.12 and 1.05. We broke below it before breaking above it, so from this perspective, the market is showing signs of confusion. If we break down below the 1.12 level, then I think we will return to that consolidation region. However, if we break above 1.15, then we could go looking to the 1.18 level. All things being equal, I think in the short term we've got a lot of sideways action ahead of us.
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