As Americans came back from Memorial Day weekend, liquidity issues were no longer to blame, it became a simple lack of directionality for the EUR/USD pair. At this point in time, we begin to enter the summer season, and quite frankly that is often some of the best trading of the year if you know how to trade range bound markets.
It’s very likely that we are going to continue to see the 1.1250 level offer significant resistance. Just as true, it’s likely that the 1.11 level will continue to offer significant support. Knowing this, one can employ some type of stochastic oscillator system or similar indicators to trade this marketplace. Beyond that, you can trade simple price action.
At this point in time I believe that the 1.1250 area will eventually offer some type of shooting Star that we can sell against, with a relatively tight stop. If we were to break above that level, then it opens the door to a bigger move, possibly as high as 1.1450. To the downside, if we were to break down below the 1.11 handle, then it opens up a move to the 1.10 level which I see has been more supportive from a longer-term standpoint.
Although the European Union still looks relatively soft, the question now is who is left to sell? We are by all means that historically relatively low levels, so one would have to think that sooner or later I come back into the market. Keep in mind that this pair is relatively choppy and sideways most of the time anyway, but during the summer months it’s going to take a lot of patients to trade this marketplace. 50 PIP trades are probably what we are looking at for the next couple of months, and quite frankly do enough of those in a row and you get a nice return.
It’s very likely that we are going to continue to see the 1.1250 level offer significant resistance. Just as true, it’s likely that the 1.11 level will continue to offer significant support. Knowing this, one can employ some type of stochastic oscillator system or similar indicators to trade this marketplace. Beyond that, you can trade simple price action.
At this point in time I believe that the 1.1250 area will eventually offer some type of shooting Star that we can sell against, with a relatively tight stop. If we were to break above that level, then it opens the door to a bigger move, possibly as high as 1.1450. To the downside, if we were to break down below the 1.11 handle, then it opens up a move to the 1.10 level which I see has been more supportive from a longer-term standpoint.
Although the European Union still looks relatively soft, the question now is who is left to sell? We are by all means that historically relatively low levels, so one would have to think that sooner or later I come back into the market. Keep in mind that this pair is relatively choppy and sideways most of the time anyway, but during the summer months it’s going to take a lot of patients to trade this marketplace. 50 PIP trades are probably what we are looking at for the next couple of months, and quite frankly do enough of those in a row and you get a nice return.