By: DailyForex.com
The EUR/USD pair shot straight up during the session on Friday, but as you can see the 1.30 level has yet again offered enough resistance to keep the pair down. This market looks like it wants to stay sideways, which of course has been its attitude for some time. In fact, if you look at the chart overall, you can make a serious argument for a summer range between the 1.28 and 1.30 levels.
.jpg "EUR/USD may 27")
I essentially see this market as having to levels. The first level, is between the 1.28 handle and the 1.30 handle. The second-level of course goes from the 1.30 handle to the 1.32 handle. We are simply going to bang around each level and on the occasional breakout to the upper or lower level just repeat the action in the new consolidation zone. It seems that the world has forgotten about the European problems, and complacency normally leaves the some type of violent move. That may or may not come sometime soon, we really don't know but in the end it appears that the market is content in this general vicinity.
More sideways action
It looks like more sideways action is in store for the market. Quite frankly, I'd really don't see the catalysts are moving this market and less trader suddenly focus on a lot of the zombie banks in the European Union. There is the possibility that the debt market start acting up as well, but quite frankly it appears that the European Central Bank cutting its rates recently is enough to at least appease the market for the short term. Perhaps the ECB will start to act like the Federal Reserve, and try to kill off devalue the currency. If that happens, don't expect the Euro to think too quickly, after all they are going up against the professionals when it comes to devaluing the currency.
Going forward, I believe that short-term trading is going to be your only chance, and the set up that we currently have suggests the same thing. On a break of the lows from the Friday candle, I will short this market and try to collect 75 pips to the downside. As far as going higher, if we do manage to break above the 1.30 level, I think that a long position can be had at that point, but just for 100 pips or so.