The EUR/USD pair continued to grind away in a larger sideways consolidation area on Wednesday, gaining until we hit just below the 1.30 level. That level of course is been overly resistive, while the 1.28 level at the bottom of this consolidation block has been rather supportive. I believe that we are simply grinding away between these two levels, and until we break out of that this will be a short-term market only.
I also believe that the 1.30 level is simply the middle part of a larger consolidation area. Think of it this way: we are in the bottom half of the larger consolidation area. Even if we break above the 1.30 level, I don't necessarily feel that this market is going to pick up a lot of momentum in one direction or the other. I think it will simply drift into the 1.30 – 1.32 range above, and do the same thing it's done over the last couple weeks. After all, that pretty much describes the entire month of April for this market.
Summertime trading
Sometimes the summertime in the Forex markets can be quite dull. With that being the case, I have a hard time believing that this market will do anything but that. This is of course unless there some type of European headline that blows things up again. The 1.28 level below though is very supportive, and is the beginning of some serious supportive action on the longer-term charts. Is because of this that I feel we are looking at the range for this marketplace until traders return in August sometime.
Obviously, if we break out of the 400 pip range that we have been stuck in over the last couple of months, this of course would change things but I'm not necessarily holding my breath for that move. In fact, I believe that this is an excellent market to trade short term charts in, and nothing beyond that. My personal favorite at this point time would be the 15 min. chart, with very small positions as that lower timeframe type of trading can really chew up your account if you're not careful.
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