The EUR/USD pair bounced around during the session on Thursday, but did not break out of the consolidation that we have been seen over the last week or so. The 1.33 level looks very resistive to me at the moment, and with the fact that we are at the end of the year being a major influence in this market, I find it difficult to think that we get a break above that area with any significance.
With that in mind, the 1.3150 level has offered significant support recently, and although I've seen quite a few very weak looking candles over the last two weeks, I am not quick to start selling at this point. I would need to see a daily close below the 1.3100 level to be convinced at this point in time. With the debt talks going on in the United States, there are headline risks going forward, but the truth is that very few large traders will be in the market right now, and as a result we should continue to go sideways.
Options
If you have the ability to trade options in this currency pair, I would recommend using that as your vehicle over the next several sessions. There is a real possibility that we do not breakout of this range, and as a result you could sell a call above the 1.33 level, while selling a put below the 1.3150 handle. In other words, you expected to stay within this range. If one gets triggered, the other one should pay you in order to keep your losses somewhat minimal in what has been a very calm currency pair.
Having said that, if you are trading the spot Forex market you may find this pair to be very difficult to deal with right now. Simply put, it is one of the least interesting pairs that I see right now and as a result I have no position. I certainly think that once January comes around we will get some type of significant move, but right now I do not see what that would be.