The EUR/USD pair has been quite volatile recently, and the action on Thursday just showed more of the same. After all, the market went back and forth and had a fairly decent sized range, but at the end of the day had not really establish much in one direction or the other. Because of that, we formed a very neutral candle, but what I am paying attention to the most is that we are below the 1.35 handle. The fact that we are below that area does suggest that the sellers are still in control overall, although we most certainly are seeing quite a bit of cross flow.
Ultimately, I believe that this market goes down to the 1.33 handle, but it is in fact going to take some time. This market is very choppy, and I don’t expect that to change just because we broke down below the 1.35 handle finally. With that, I believe that this is the type of market that you want to play from the short term charts, giving you an opportunity to sell and sell again.
Hourly charts.
I believe that I will be playing this market mainly from hourly charts and the like. I understand that the pair is fairly choppy, but by using the daily chart as a guide and aiming for short-term trades, I think that is going to be the best way to play this market simply because every time I have tried to hang onto a trade for any significant amount of time, it’s been more trouble than it’s worth.
Also, this allows you to get more out of each move, as there will be several opportunities the short this market for 20 or 30 pips on the way down to the 1.33 handle. On the other hand, if you shorted from here and aim for that number, you would only be looking at perhaps maybe 100 pips or so. Sometimes, you simply have to play the cards that are dealt to you, and this chart is a perfect example of that.
