• The Euro has rallied against the US dollar during early trading on Tuesday, as the world waited for the congressional testimony from Jerome Powell.
• All things being equal, the market is just simply continuing the move that it has made previously, so I don’t know that there’s a whole lot to talk about here.
• It’s just a simple continuation play, which is focused on the 1.16 level, an area that has been important multiple times, and I do think that if we can break a significant amount of distance above there, then we could get something going.

Otherwise, I think this is a market that will continue to be very noisy, with the massive amount of support at 1.13 underneath worth paying attention to. If we were to break down below there, then it would change a lot of things.

Right now I just don’t see a reason to think that things will change drastically enough to send the market below the 1.13 level, unless we get some type of major escalation in the Middle East, which has seen a cease-fire between the Iranians and the Israelis, which is more helpful for “risk on behavior”, which typically works against the value of the US dollar. We should be careful to make that assumption though, because a lot will come down to whether or not the US is starting to grow again.

Watching Closely

I’m watching closely to see if we can get a daily close above the 1.1650 level, because if we do, that could end up being a very bullish sign for this pair. However, I also recognize that this is a market that tends to be very noisy and grinds a lot, especially when you have a lot of geopolitical risks out there that could come into the picture in cause absolute chaos. Short-term dips are very possible and very likely, but the art necessarily reasons to start shorting the market at this juncture. I believe it is a scenario that continues to favor the overall back and forth choppiness that we have seen, and I also recognize that range bound traders will continue to be drawn to this stagnant, yet slightly bullish market.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.