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Forex pairs in this Article » EUR/USD

The EUR/USD pair fell during the session on Tuesday, but as you can see the 1.32 level is still offering a significant amount of support, considering that we could even get that close to it. It's below there that I start selling the Euro, and not a pip before. This is because I see this is a range bound market at the moment stuck between the 1.32 handle and the 1.34 level.

Above the 1.34 level, I think we will go much, much higher. The Europeans are coming out of a recession, so you would think that the Euro would be doing better. However, everybody's paying attention to what the Federal Reserve will or will not do during the month of September or October as far as quantitative easing is concerned, and as a result it really comes down to what Ben Bernanke says. Until we get some type of clarity on that, expect choppiness and quite frankly a market that I don't want to be involved in.

EUR/USD Daily Chart Aug 14

Short-term traders rejoice

If you are short-term trader though, this is the 200 PIP range that you can play. Look to the 15 min. charts or something of that ilk to guide your trades. You can obviously use the 1.32 is the bottom, and the 1.34 is the top until of course we break out in one direction or the other. However, I personally want to see a breakdown of 1.32, because that would not only be predicated possibly on tapering off of quantitative easing by the Federal Reserve, which should make this pair move down to the 1.28 handle relatively quick. If we can get below there, look out below, this pair would absolutely collapse which could be very large gains.

On the other hand, if we continue higher we will more than likely see 1.35 followed relatively soon by 1.40 or so. However, until we know what we are going to actually do, guessing at this point time is simply gambling. True, it's a 50% chance but its still very dangerous to trade that way and I will not do so.

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