The EUR/USD pair fell during the day on Monday, but remained within the consolidation area that we had been trending in for a couple of weeks now. The 1.33 level below of course is very supportive, and as a result we need to get down below there before I would consider selling this market. At that point in time, I would assume this market to break down to the 1.30 handle relatively quick. On the other hand, this is an area where we could see a significant amount of support, so we always could have a buying opportunity based upon a supportive candle.

I also believe that the 1.35 level above will be resistive, just as the 1.3450 level is. With that being the case, this is going to be more of the typical EUR/USD pair type of behavior, meaning that the markets will simply grind sideways and do nothing in general. Short-term trading will continue to be the way, and as a result the markets should continue to be traded off the short-term charts in general.

Options are an option.

I believe that using options to trade this market would be an option as well. After all, you can keep your risk known had a time, and a relatively low. I believe that we probably have more upside potential at the moment, but that’s more or less a short-term bounce than anything else. I don’t think there were going to break out significantly, because the downtrend is so prevalent, and quite frankly there are far too many reasons to think that the European Central Bank is going to continue monetary policies that are relatively easy. On the other side of the Atlantic, you have the Federal Reserve which of course could very easily continue to taper off of quantitative easing, which of course is bullish for the US dollar.

Ultimately though, I think that you’re going to see trading intervals of roughly 50 pips each move, and as a result it’s difficult to trade this instrument for anything more than a couple of hours at a time.

EURUSD 81914

Related Articles
  1. Savings

    Your 6 Worst Financial Mistakes

    Here are six financial mistakes you may be making, and a viable alternative for each.
  2. Investing Basics

    The Biggest IPO Flops

    Even with the uncertainties of IPOs, companies will keep issuing them in efforts to grow their enterprises, and some will end in disaster.
  3. Investing Basics

    Understanding Cash Management

    Cash management is a broad term that applies to the collecting, managing and investing of cash.
  4. Savings

    What is a Bounced Check?

    Bounced check is a slang term to describe a check that cannot be processed because its writer has insufficient funds.
  5. Economics

    Explaining Appreciation

    Appreciation refers to an increase over time in the value of an investment or asset.
  6. Savings

    10 Ways To Budget When You’re Broke

    Budgets are some of the best financial tools around – when planned properly and followed faithfully.
  7. Savings

    10 Steps to Retiring as a Millionaire

    Retiring with a million-dollar portfolio may sound like a dream, but it’s certainly attainable.
  8. Savings

    7 Ways to Trim Fat from Your Spending

    Check out these seven ways to cut the fat from your spending.
  9. Savings

    7 Millionaire Myths

    Here are seven millionaire myths and realities that reveal they don’t quite have it all.
  10. Taxes

    7 Expenses You Won’t Believe Are Deductible

    You may be surprised at some of the things that qualify as legitimate tax deductions. Here are seven that are especially quirky.
  1. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  2. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  3. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  4. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  5. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  6. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!