By: DailyForex.com

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

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