The EUR/USD pair initially fell during the session on Thursday, as the 1.1080 level offered support. The market has been very choppy overall, and I think that there is a real chance of this continuing. You have to keep in mind that the time of year isn’t conducive to large moves, so I think that we will more than likely find the 1.12 level resistive still. The market will more than likely find sellers in this area, and as a result I am more than willing to sell any resistive candles, especially on the daily timeframe.
Nonetheless, I feel that there are several levels to pay attention to in this market. The 1.10 level below is also supportive, as it is essentially “fair value” as it is in the middle of the overall range between the 1.08 level and the 1.12 level. This means that the markets will more than likely be attracted to this level again and again.
Small time frames, small position sizes
The best thing that I can say is that you will more than likely be best served by keeping the position size small, as the choppiness should make things very uncomfortable from time to time. The market could break out, but in the end I think that if it does – there will be a lot of danger in holding onto the position for any real length of time. Even if we broke out, I feel at best we are going to the 1.14 level. However, the real move will probably happen once the liquidity comes back into play. This should be about two weeks from now, and with that being the case, I begin to look at the 1.15 level as a potential breaking point, and at that time the market will have changed the overall trend and should start heading higher over the longer-term. However, if that happens right away, I would be suspicious. In the meantime, I can only trade the ranges.
