The EUR/USD pair initially fell during the course of the day on Friday, but bounced enough to form a bit of a hammer. It showed yet again that the 1.11 level offered support, as it has several times already. What I find interesting is that the 1.13 level offered so much resistance in the previous session during Thursday. With this, I feel that the market is essentially going to be a back-and-forth affair between these 2 levels, and as a result I have no interest in trading this market except from ultra-short-term charts. That’s not necessarily my style, so at this point in time I still don’t like this pair in general.
However, I know that unfortunately a lot of new traders are sucked into the idea that trading this pair is the “easiest” one to do. That unfortunately is due to the fact that it has such a small spread. However, it’s not the spread that you need to overcome, it’s the reactions and more often the actions of the market that you are involved in.
Choppiness
This market is the epitome of a choppy market. It has been for some time as high-frequency trading has become the norm. With that being said, you have to keep in mind that there are a lot of different factors moving at one time in this market as well. After all, you have the Federal Reserve failing to raise interest rates and that of course shocked quite a few traders out there. But at the same time, you also have a lot of concerns in the European Union, and more importantly the Federal Reserve suggesting that perhaps it was the rest of the world that was causing the issues, and not only the United States as far as they were concerned. The markets listened, and now we are starting to see a bit of a run back to the US dollar.
At the same time, Europe is doing a little bit better, but people are still a bit leery. Confused yet? If you are, do not despair. You are simply the same as the other market participants in my opinion.
