By: DailyForex.com
The EUR/USD pair fell during the session on Monday as the 1.30 level appears to be offering quite a bit of resistance. However, by the end of the session we saw a little bit of a reprieve, and as such the pair still looks like it's prone to go sideways.
I can see quite a bit of resistance from 1.30 to the 1.35 level, so I am not keen on going long at this point time. Unfortunately, there is an uptrend line that is also showing quite a bit of support currently and this makes this pair less attractive to me in either direction. It simply seems like we are in the middle of a squeeze, and as such I will need some type of confirmation in order to either buy or sell.
On a break of the trend line, I would begin to think about selling this pair. If we can get below the 1.2850 level, I would think that we would continue much lower, and the lower high would have been confirmed at that point. After all, the Friday candle sitting just above the 1.30 level is a shooting star, which of course is a bearish sign as it shows exhaustion. Currently, because of the fact that we do see bearish action but a strong supportive trend line, I feel that this pair is going to be prone to shake a lot of traders out in both directions.
European Finance Ministers Meeting
European finance ministers are meeting in Luxembourg, and as such the world waits to find out what kind of moves the European Union will do in dealing with its debt crisis. During Monday, we solve very little in the way of action but there is always the possibility of further decisions been made. Angela Merkel is going to be in Greece today, and this of course can move the markets via headlines as well. In other words, there are simply far too many variables out there to be confident trading this pair in one direction or the other. I believe this is why we are seeing such resistance above, and such support below. Because of this I am very neutral of this pair at the moment.