I suspect that this market is going to continue to find plenty of support at the 1.25 handle, and then again won’t be able to break out to the upside, at least not for a significant move. The next couple of days are going to be very choppy and sideways, so therefore very unlikely to be able to be traded for anything more than a scalp.
If we did breakdown below the 1.25 handle underneath, the market should continue to go to lower levels, perhaps the 1.2350 underneath. Ultimately, this is a market that I think will be something that only short-term traders will be involved in over the next couple of sessions, but I do think that by the time we finish the session on Friday, we should have a better idea of where this pair is going to go. If we do break down, the market goes down to the 1.20 level longer term. Otherwise, if we rally above the 1.26 handle, I think the market may go looking towards the 1.29 handle.