The EUR/USD pair pullback initially during the session on Tuesday to finally find support somewhere below the 1.36 handle. The resulting support ended up forming a hammer, and as a result it now looks to me as if the market could head towards the 1.37 level, an area that has been massively resistive previously. Because of this, I feel that the move higher is probably coming, but it won’t necessarily be a longer-term trade. This is simply a quick “smash and grab” type of situation, and as a result I will it as such. I believe that ultimately this market should continue to stay within the consolidation area that we have been in for some time.
Back consolidation area is bordered by 1.35 on the bottom, and 1.37 on the top. With that being the case, the market should continue to be one that prefers short-term traders, and trading types of strategies. I don’t really see the market breaking out anytime soon, quite frankly there isn’t much in the way of a catalyst that I can imagine at this point in time
Summertime range
I believe that we may be looking at the summertime range now. The markets do tend to become kind of quiet during this time period, and as a result it wouldn’t surprise me at all to find a nice 200 pips range quite to the liking of the summertime market. With that being the case, I will start looking at hourly charts, and with that being the case, I believe that quick 20 or 30 pip trades will probably be the best route to go. I can’t really imagine a situation where I would want to hang onto a trade in this market now, as it simply does not seem to have the ability to offer anything of substance.
With that being said, I do recognize that a move above the 1.3750 level would in fact be very bullish, and lead to a longer term buy-and-hold type of situation. On the other hand, if we break down below the 1.35 handle, we could see this market drift all the way down to the 1.33 level.
