- The Euro has rallied pretty nicely during the trading session against the US dollar, but it is probably worth noting that we are still in this range.
- As a result, I think you’ve got a situation where traders are trying to sort out where to go next.
- Ultimately, this is a market that given enough time will probably have to be sorted out a little bit with the market basically looking at the 1.15 level as an area of importance and the 1.12 level as an area of importance.
We are getting closer to the top of this range, and I think you have to understand that this market is definitely one that is trying to sort out what’s going on in the United States as the PMI numbers for manufacturing came out weaker than anticipated during the day.
That being said, if we do start to see recession worldwide, a lot of times that’s actually good for the dollar. And that might be part of what we’re seeing here. You may see money running into treasuries and that might put a little bit of a lid here.
If We Break Higher from Here
The 1.15 level being broken to the top would be extraordinarily bullish and it could open up a move to 1.1750, but a breakdown below the 1.12 level could open up a move down to 1.0950 underneath. I think ultimately, we are still very much in a 300 point range between 1.12 and 1.15. With that, I think we’re going to see a little bit of a pullback here as we try to sort out where we want to go longer term. It’s a very quiet time of year typically as well, so think about range bound trades in the meantime, as this market seems a bit sideways overall.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.