The EUR/USD pair continued to grind its way higher during the session on Thursday, as the 1.12 level has been broken. With that being said, today is Labor Day in Italy, Switzerland, Germany, and France. With those countries having bank holidays, it’s very unlikely that this market will be very liquid. Because of this, I will more than likely stay out of this market, but I do recognize that we are in an area where we should start seeing the possibility of a pullback.
I believe that the 1.10 level below is supportive, so I don’t necessarily believe that selling is something that’s going to be easily done, but at this point in time we are starting to get to a significant resistance barrier in the form of noise all the way to the 1.15 handle. I believe that this market is about to become extraordinarily volatile, and will probably be a painful place to trade.
Potential range trade
I think that this market will more than likely try to find some type of the range to trade back and forth from. I believe that the 1.10 level is obvious support, but then the question becomes where does the resistance start? I think it is at the 1.12 level, but it is obvious that the market still wants to go higher. I think that somewhere near here we will start selling now, and I believe we may have to grind around for a while in order to build up enough momentum to either break up or down.
It be interesting see what happens with the Euro Dax because quite frankly the selloff has been so vicious. With that, I think you really have to be careful trading this pair at the moment, as I believe that there are much easier trades out there. Unfortunately, new traders tend to gravitate towards this pair on the misconception that the small spread can make or break them. The truth of the matter is, unless you are scalping that should not be a factor in your trading. Speaking of scalping, I think that’s about as good as this pair is going to be.
