The EUR/USD pair went back and forth during the session on Monday, finding the 1.30 level is far too resistive, while the 1.29 level below offers support. This very neutral looking candle suggests to me that we will continue to grind away in this market, and probably struggle for any real sense of direction for any real length of time. Granted, we did selloff pretty significantly last week, but in the end this pair tends to have nine lives over the course of time, and as a result it is always difficult to short.
I believe it will take a break of the 1.29 level to the downside in order to be able to sell this pair. Unfortunately, below there will be another support level at the 1.28 handle, meaning that the trade would be short-term and length at best. On the other hand, a move above the 1.30 level would more than likely see the marketplace trying to reach the 1.32 handle over the longer term.
Choppy conditions ahead
I believe that we are to see a lot of choppiness in this pair, which of course is a real stretch to consider after we have seen nothing but that for the last couple of months. However, this is what I see on the chart, and there's not a whole lot I can do about it. If you looking at the blue moving average on the chart, it is the 50 day moving average, and you can see it has been relatively flat as of late.
On top of that, there are all of the support and resistance areas in the general vicinity that could move the markets from time to time, and more importantly: keep it from moving with any fluidity. With that being the case, It will more than likely be hard pressed to find a trade in this market over the next few weeks for anything more than a simple handful of pips – or a scalp if you will. Until we break out of the outer reaches of the consolidation zone, (1.29 and 1.32) this market isn’t going to be easy to trade.
