The EUR/USD pair had a very volatile day during the day on Monday, going back and forth during the trading session. We initially tried to rally, but then pulled all the way down below the 1.08 level, an area that has been rather supportive. We bounce back above there, and as a result it looks as if market is not ready to break down quite yet. The 1.1050 level above has proven to be resistive a couple of times now, and as a result it appears that we are still stuck in this consolidation area.
This was a pretty wild day though, and as a result you have to think that certain accounts would have been punished. This tells me that at the moment though, we are not quite ready to break down. I expect more volatility in the short-term. Having said that though, I think ultimately we will break down. The one-hour chart looks very bearish, as we have bounced but have not been able to hang onto gains significantly. I believe that you can use the lows of the day at the 1.0 780 level as a marker in order to start selling. Below there, things get very bearish.
