The EUR/USD pair fell during the session on Thursday, bouncing around in the consolidation box of the market been trapped in for the last month or so. This area is fairly well defined, as the 1.32 area seems to be the top, while the 1.30 level seems to be the bottom. Granted, both of those areas have a certain amount of "thickness", and as a result a simple break of the 1.32 level would not be enough for me to start buying. I would need to see the top of the shooting star from the beginning of May get broken to the upside in order to start buying. As for selling is concerned, there is a hammer back in late April that sits on the 1.30 level that would need to be broken down below in order for me to do so. In the meantime, I believe that this is a short-term scalper’s type of market, and because of that I have not traded in quite some time.
Having said that, I do believe that there are profits to be made. Simply following the back-and-forth motion can earn a trader 30 to 50 pips relatively easily, but you have to be willing to accept the fact that sooner or later this market will breakout. When it does, you could find yourself on the very wrong side of the trade.
Summertime is coming, and that could mean very little action.
The summertime can be very quiet in the Forex markets, and this could be a harbinger of things to come. We may find ourselves simply drifting sideways between a couple of levels as the market simply grinds back and forth. If that's the case, this could be a very profitable currency pair if you are willing to simply go back and forth and swing for small amounts of profit instead of trying to gain large ones. However, there is always the ever present danger of some type of headline coming out of Europe that rocks the markets, and of course the Federal Reserve will do its best to kill off the value of the Dollar.
