Euro bounces around during Tuesday session

The EUR/USD pair has rallied significantly during the day on Tuesday, only to pull back to test support again. I think that the market is trying to form a short-term base, but right now I think the only thing that you can count on is that we will have a lot of volatility. Because of this, I think you should be careful about your position size, but right now it looks as if there is a lot of noise in the market, and therefore it might be difficult to be stringent in the way you trade. I think that the market will probably be very sensitive to interest rate situations in the United States, as the 10-year note has been spiking as far as rates are concerned.

Beyond that, there are a lot of concerns when it comes to Italy now, and that should continue to weigh upon the Euro in general. I think that the market will look to sell rallies, but we are a bit oversold in general and when I look at the hourly chart it’s not difficult to imagine that we are forming some type of basing pattern. That doesn’t mean that it’s time to start buying, just that we could see a bit of a bounce in the short term. If we were to break down below the 1.1725 handle, that opens the door to the 1.15 level. I believe that the 1.1850 level is going to continue to offer significant resistance, and therefore look at it as a bit of a short-term “ceiling.”

EUR/USD Forecast Video 23.05.18