The EURUSD pair initially tried to rally during the session on Wednesday, but then fell significantly towards the 1.13 level below.

We bounced significantly from there, as this volatility was caused by a random tweet coming across the wires that suggested perhaps the ECB statement was a little misunderstood during the previous session, which of course was the reason we rallied.

However, the market came back to life as the market continues to be very jittery. Part of this volatility may have been caused by algorithms out there that retweets and then start trading immediately. This shows the danger of high-frequency trading, as people got wiped out due to an unconfirmed message on the Internet.

Buying the dips

I continue to believe in buying the dips, and that will certainly have been shown to be the case during the day on Wednesday, as we bounced significantly. A break higher should send this market to the 1.14 handle, and then eventually the 1.15 level after that. The 1.15 level is massively resistive, and has been the top of the three-year consolidation area that we have been stuck yen, which of course has the 1.05 level on the bottom as support.

Ultimately, if we can break above that level, then I think the market goes much higher but currently I don’t see the reason to think we’re going to break out of this consolidated of area. Nonetheless, I think that we are going to try to reach the 1.15 handle, so I am bullish, lease for the short term when it comes to the EUR/USD pair. The market isn’t one I am going to be selling anytime soon, least not until we break down below the 1.13 level below, and for a few hours.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro (EURUSD), minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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