By: DailyForex
The EUR/USD pair rose during the session on Wednesday, and gained significantly. However, as you can see the 1.32 level has offered enough resistance to repel price. The candle itself does look supportive though, so I have to suggest that perhaps this market may have a bit of a bid in a going forward, and that is significant attempt to take out resistance may have been.
Look at this chart, for me it is obvious that breaking the top of the shooting star from the previous week will be crucial in order to continue higher. This gives us a resistance level of 1.3250 being the top of the range of resistance, and therefore that is the level that I need to see this market close above on the daily chart in order to start buying the Euro. On the other hand, I can make an argument from shorter-term charts that we may begin to grind sideways overall. Quite frankly, if we cannot get above the 1.320 level for another day or two, then says more to me than anything else.
Summer sideways action?
Quite often, you will see the Forex markets quite down during the summer trading months. Larger traders simply walk away and go on vacation, this of course gets a lot of the big influence out of the markets. Nonetheless, there are trading opportunities during the summer, although they tend to be of the shorter-term variety as we grind sideways and stay somewhat range bound. I don't know whether or not this range is what we're going to have to work with over the next couple of months, this may be a preview of what were about see during the summer time.
Going forward, I think that a breakout needs to happen in order to trade this market for anything more than about 50 pips of the time. That's not to say there's anything wrong or unsafe about doing that, just simply that it will be a market you have to watch as you trade, as opposed to being able to place a trade in walk away from the computer.
