Euro bounces around during the Friday session
The EUR/USD pair has gone back and forth during the trading session on Friday, as we continue to dance around the 1.17 region. This is an area that I think will continue to be very important, but it’s only a matter time before the sellers come back. We might get a short-term burst from here, because we did fall far to quickly in an overdone manner. However, this bounce should just end up being a bit of a relief rally more than anything else, so look for signs of weakness the start selling again. I think that if you are patient enough, you should be able to find a resistive daily candle. Quite frankly, it does look like we are struggling to maintain any bullish attitude, so a break down below the 1.16 level would have me shorting again as the market would probably have to retest the 1.15 handle.
Ultimately, this is a market that will continue to be very noisy as high frequency trading swaps this market. Unfortunately, it makes it very difficult for the retail traders to get ahead unless they look at the longer-term picture. In general, I believe that this pair does continue to test the 1.15 level underneath, and if it can break down below there, it’s likely that we will go much further after that. In general, the US dollar should continue to outperform most currencies, but we may have gotten a bit too far ahead of ourselves.