The EUR/USD pair rallied during the day on Monday, using the 1.08 level as support. We have recently been consolidating between 1.08 level on the bottom, and the 1.1050 level on the top. With that, the market should continue to bounce around in general, offering short-term trading opportunities only. That’s not necessarily out of the norm for this market though, because quite frankly the EUR/USD pair has become the realm of high-frequency trading and scalping at this point in time. Yes, there are longer-term trends that are clearly defined from time to time, but for the most part longer-term traders are starting to shun this market.
With this being said, I think it’s easy to say that we can start buying Euros above the 1.1050 level, and of course selling those very same Euros below the 1.08 level. I think the pullbacks to the 1.28 level should have more than enough support to keep afloat though, so a supportive candle in that area is a buying opportunity as far as I can see. I believe that over the next several sessions, the market will probably continue to go sideways overall as we are so close to the holidays.
Selling Opportunities as Well
I also believe that there are going to be selling opportunities as well, as the 1.1050 level above should continue to offer plenty of bearish pressure. In fact, I don’t think that the consolidation area truly is shattered until we break above the 1.11 handle, something that I don’t see happening in the short-term. The Christmas holiday of course is coming in a few sessions, so at this point in time liquidity will become a very big missing piece of the market.
A lot of this comes down to people trying to figure out what the Federal Reserve is going to do next, and the Final GDP numbers coming out today could be a little bit of a boost for the US dollar if it is a fairly strong number, but ultimately I believe that we will continue to trade in this range over the next couple of days.
