The EUR/USD pair initially fell during the course of the day on Monday, but found enough support below the 1.36 level to form a fairly positive candle, and as a result I would not be surprised at all to see this market continue to go higher, but there is a significant amount of resistance near the 1.37 level. Because of this, I feel that the buying opportunity that we may be seeing word in fact be short-term at best. The resistance area at the 1.37 level should extend all the way to the 1.3750 level, which I see as the top of the selling pressure.
Because of this, I think that the move will be short-term, and I will not trying to press above the 1.3680 level, and would simply take profit at that point. On the other hand, if we broke down below the bottom of the candle for the session on Monday, it is possible that we go down to the 1.35 handle, but I see a lot of noise between here and there, in fact I see more than here and the 1.35 level than here and the 1.37 level.
It is not until we break consolidation that I am risk any serious amount of money.
I have no interest in risking any serious amount of money until we break either above the 1.3750 level, or below the 1.35 handle. In the meantime, small positions could be used, or one could also play the options market, essentially playing a range pound type of trade. In other words, selling calls above the 1.3750 handle, and puts below the 1.35 handle, depending on what the premium is in those markets.
Ultimately, I think that there should be plenty of trading opportunities in both directions in the meantime, but you will have to be very nimble in order to take advantage of these traits. Binary options might also be a particular route to take in the meantime as well, as a highly leveraged position could in fact get dangerous and what I see as a very choppy market.
