The EUR/USD has a number of hurdles to overcome before a ceiling it established. I am looking for a ceiling – for now – since the market trend has transitioned into a sideways range. IT IS early in the transition but a “V” bottom is unlikely here with the underlying fundamental picture and the 1.3050 to 1.3200 area is a thick layer of resistance.
I’m not going bearish on the dollar nor bullish on the euro in a longer-term picture. For now I will watch for a trading range to develop in each. There is not a complete enough picture to drive either into a trend yet, although Ben Bernanke did give the greenback a strong shove…off a cliff.
One thing to note as a follow up to my last update: The 50 period SMA close was blown out of the water by the dollar’s sell-off and now must be considered near-term support. The pair is now battling at the 1.3100 major psychological level which is still 100 pips from top of the trading range I have highlighted in this update.