The EUR/USD pair initially tried to rally during the course of the day on Monday, but failed at the 1.13 level yet again. This just confirms what I have thought for some time, but this market really doesn’t know where to go yet. I think that we will continue to consolidate in this general area, with the 1.13 level of course being the resistance, and the 1.11 level below being the support. With this, the market should continue to be fairly tight but I still believe that the longer-term trend is to the upside. We formed a shooting star during the session on Monday, which of course suggests that we should go lower.
The uptrend line below of course is supportive, and I think that will continue to be the case. When you look at the longer-term charts, there is an ascending triangle that has its ultimate resistance at the 1.15 level. I think that we could eventually break above there, but at this point in time it’s going to take quite a bit of momentum and confidence to get above that area, which is something that we just don’t have.
Short-term trading only
I believe that this market should be a short-term trading opportunity at best, so I am looking for short-term trading opportunities off of short-term charts. I do not think that you are going to be able to make much money on the daily chart at this point in time, mainly because we don’t have a lot in the way of clarity, and certainly do not have the proper risk to reward ratio happening.
I believe that this market will probably continue to be like this for a while, and as a result it is more than likely going to be difficult to gain more than about 30 or 40 pips at a time. With this, I think that is the way you’re going to have to look at this market, almost in a day trading sense.
