The EUR/USD pair fell during the session on Monday, but as you can see remains well within the consolidation area that we've seen over the last couple of weeks. Actually, when you look at this chart you can make a little bit of a case for a channel, with a slightly upward bias. Nonetheless, it has been very choppy trading since the middle of July, and I do not anticipate that the change anytime soon.
The Federal Reserve and whether or not it's going to taper off of quantitative easing has taken over the marketplace, and as a result the Federal Reserve will more than likely determine where the Euro goes. After all, we all know that the European Union has recently exited recession, but that only gave the Euro somewhat of a boost. In the end, the Federal Reserve controls the currency markets most of the time, and I believe that is exactly what we're seeing here.
September meeting
This will all come down to the September meeting, and whether or not Ben Bernanke suggests that the Federal Reserve is going to taper off of quantitative easing. If they do, expect this pair to absolutely collapse. On the other hand, if they blink and give the market what it wants yet again, expect this pair to skyrocket. In the meantime, it will be very sensitive to headlines so you need to be prepared to get in and out of the market relatively quick.
As for me, I have decided to ignore this pair. I know that's blasphemy to some Forex traders, but quite frankly even though there is an uptrend that we've been in for two months now, it's been so choppy why bother? There are many markets out there to be a lot easier to trade in this one, and quite frankly if you can get an easier set up in another market, why bother with this one? I will more than likely monitor this market, but right now I see absolutely no setups or price action that compels me to do one thing or the other in this pair.
