Forex Signal - EUR/USD Range Trading the Mixed Market

12-03-08

4:11a GMT - Looking at the 4-hour chart of the EUR/USD a thought crossed my mind: the market looks as confused as traders are! Up and down, up and down no real direction. My next thought: a classic range trade. Six months ago everyone thought the EUR/USD was going to 1.70. Four months ago most thought the EUR/USD was at least going back to 1.60. Now most traders are just scratching their heads, not sure where the pair is going. So it is time for a little range trading until the market picks a direction again.

On the chart I analyzed below I’ve displayed a variety of support and resistance levels in red for you to look for bearish/bullish signs around. The yellow lines at the top and bottom are the limits of the daily range - beyond these and the range trading is broken. The blue arrows are not necessarily where I think the market is going but are meant to show the general range nature of the pair right now.

Trading Idea: Closest resistance is 1.2765. Look for bearish signs around this level on shorter time frame charts for a return to support levels (closest is 1.2675). Beyond these levels look for trades at the other red lines (support and resistance) for more entries/exits.

(click to enlarge)

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