The EUR/USD pair fell during the session on Friday, but as you can see the range was relatively small, which of course makes sense as the Americans would have been away at the Independence Day holiday. That of course has an adverse effect on liquidity, so by the time the Europeans went home, the markets were essentially dead. The market remains around the 1.36 level, but I believe that this market is going to pay more attention to the 1.35 level for support, and the 1.37 level for resistance.
The 1.37 level seems to extend all the way to the 1.3750 level, so I believe that raking out above this range is probably not going to happen or some time. In fact, I’m starting to begin to think that perhaps the summer range is going to be between the 1.35 level on the downside, and the aforementioned 1.37 level.
Short-term trading only.
I believe that this market is going to be very difficult to trade in general, and we should continue to see lots of short-term trading. Small gains will probably be the way to go, and I believe also that the 1.36 level is essentially “no man’s land”, meaning that we are right in the middle of the range, and therefore I’m not even looking for a trade at this point in time.
I will continue to sell near the 1.37 level on resistive looking candles, and by down at the 1.35 handle on supportive looking candles. Beyond that, I really don’t see much of an opportunity for trading in this marketplace. However, what I have been doing is looking at this pair as a sign on whether or not the Euro will be strengthening or weakening. When I use that information for is trading pairs such as the EUR/JPY, the EUR/CHF, and most importantly as of late, the EUR/GBP. With that, think of this more or less as a “tertiary indicator”, when you look at other Eurocentric pairs. However, as far as trading in this particular market, I’m not overly excited one way or the other.