Attached is the 4H chart for EURUSD. This is an interesting chart which shows consolidation. Does this consolidation point to accumulation or distribution? Only time will tell. This pair did not move much for the whole of yesterday which was to be expected after the breakout on the day before. Right now, this pair is ranging with a small range and between 1.4380 and 1.4440.
The above range needs to be broken for us to take a specific direction. If possible, we have to try to trade this range or else we need to be staying aside, as far as this pair is concerned, and try and take a trade in the right direction once the range is broken.
This will be a very difficult as well as interesting week with so much of news being released throughout the course of this week. This is how it is during the first week of every month and things begin to stabilise in the other weeks. This month would be especially volatile as we are in recession and people are looking for bits and pieces of news to either confirm the recession or to confirm that we are coming out of it. So, news in either direction would cause investors to move in that direction immediately and this leads to the additional volatility this month.
As for today, on the upside, we have strong resistance at 1.4440. If this is broken, we should see this pair move on to 1.45 and then 1.46. On the downside, we have strong support at 1.4380. If this is broken, we should see the pair move down to 1.4350 and then 1.43. I expect the range to be broken to the upside today but i could be wrong !! The key is not to outguess the market but just do what the market tells you.
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