The EUR/USD pair fell a bit during the session on Wednesday, as the market is starting to run into significant resistance. With the ECB about to give an interest rate announcement, it’s not overly surprising that this market is a bit hesitant to do anything. However, you also have to keep in mind that the 1.40 level above is indeed significant resistance as the ECB has made it a bit of a “line in the sand.”
With that, I feel that this market is going to be difficult to trade until we get that ECB announcement, and quite frankly I would not be surprised at all at the choppiness continues. After all, it seems to be the natural state of things in this marketplace, as it has been overtaken by high frequency trading. While we have been trending to the upside, it has been a very choppy move, and therefore been difficult for people to hang onto as there isn’t much in the way of swap anymore.
Short-term trading.
I think that this pair is rapidly becoming a short-term traders market only. After all, when you look at the action of this market, it’s very rare that you have a move that somebody would want to be involved in for more than a couple hours at a time. Because of this, I am not a big fan of this pair anymore, Intel most new traders that they should probably try to avoid it.
I suspect that a pullback is probably more likely than not, and there is the possibility that the 1.3850 level offers enough support for short-term bounce, thereby offering a short-term trading set up. However, I think there are much easier ways to trade the Euro at the moment, and as a result I tend to want to focus on those markets. For example the EUR/GBP market is sitting on significant support. I would have to believe that any move higher in that market is probably more likely to be realistic and true than whatever we will see in this particular market at the moment.
