The EUR/USD pair continue to grind sideways during the session on Tuesday, essentially staying in the center of the larger consolidation area that the market has been stuck in for over a month. I see the bottom of this consolidation area as being the 1.30 handle, and the top of it as being the 1.32 level. Until we break out of this 200 PIP range with significant momentum, I find this market very difficult to trade.
Looking forward, I think this is a short-term traders market at best. With that being the case, I would be more tempted to trade off of the one hour chart than anything else. The range has been fairly well defined now, so it makes sense that perhaps if somebody is patient enough, they could rob back and trade the range bound markets which tend to be reliable until they aren't….
Could this be a preview for summer?
The one question I have to ask is whether or not this could be some type of foreshadowing for what goes on this summer. Going forward, I think that is going to be difficult to see any type of significant move in this marketplace until a lot of different questions are answered. The Europeans look like they are essentially stuck in the mud right now, and as a result it very difficult to get overly bullish of the Euro for the longer-term. However, the Federal Reserve on the other side of the Atlantic is willing to do whatever it takes to inflate the economy, and as a result it should continue to weaken the US dollar
overall.
Quite frankly, if it weren't for the Federal Reserve and its meddling, this pair would more than likely be much lower, perhaps as low as 1.20 at this point in time. Having said that though, it's impossible to find the Federal Reserve, and as a result you have to simply play the ranges that are offered. In this particular case, it's 200 pips, so certainly playable but it needs to be done on the shorter-term charts. If I have time during the day, and the prices at one of the extremes, I would consider trading this pair. Otherwise, I wouldn't go out of my way to do it.
