The EUR/USD pair initially tried to rally during the course of the day on Friday but found the 1.12 level be a bit too resistive. Because of this, it looks like we’re going to continue the overall consolidation that we have been in for some time. The 1.12 level is the top of a large area that we have been finding the market comparable in, with the 1.08 level below being the absolute bottom. With this, the 1.10 level is offering “fair value.” Ultimately, I feel that the market should continue to favor the 1.10 level and with that it’s only a matter of time before we start to break down a bit. I believe that the rallies will continue to offer short-term selling opportunities.
I think at this point in time the only thing you can do is sell short-term rallies. I am not looking for massive moves at this point, and I believe that short-term rallies will appear time and time again. This should be an opportunity to take advantage of “value” in the US dollar. With that, I think it’s still going to be volatile no matter what we do, so at this point in time I am not willing to risk a large position, and certainly not willing to look for big moves. Because of that, I believe that you will have to be nimble and I will be looking towards the hourly charts, if not lower. I feel that the market continues to struggle overall, especially considering that it is the wrong time of the year to expect any massive amount of volume in the market. Because of that, it takes less to move the market back and forth so really this point in time you’re going to have to lower your expectations for large profits. However, that is not to say that we can’t make some money from time to time, as we certainly have more room to the downside than the up.
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