The EURUSD pair initially fell on Monday, but found the 24-hour exponential moving average to be supportive enough to turn the market around, and send it back above the 1.12 level.

The market then rose to the 1.1260 handle, in response to Angela Merkel suggesting that the EUR was far too cheap, and that it was the fault of the European Central Bank, suggesting that perhaps the Germans would press for a higher currency exchange rate. Because of this, currency traders got involved and started buying.

Alternately though, we were already in an uptrend, so it wasn’t a real stretch to see this market go higher. Because of this, I believe that buying dips will continue to be a nice way to play this market although I recognize that the longer-term trading range of this market limits gains to about the 1.15 handle above.

Continue Choppiness

This pair will continue to be choppy mainly due to the high-frequency traders that are so heavily involved, and of course all the headlines coming from the United Kingdom leaving the European Union. Ultimately, we arty know that the Federal Reserve is looking to raise interest rates a couple of times, so it would not be a major factor as far as any new revelations are concerned. With this, I would suspect that the 1.12 level should be supportive, and that buyers will be looking to pick up value in that general vicinity.

Selling isn’t a thought, because I see far too many support levels underneath that will continue to influence what happens in this market. With this, I believe that given enough time we should go looking towards the 1.15 handle, but it’s probably going to take several sessions if not weeks to get to that level.

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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