(mixed releases will continue to keep EUR/USD in a tight range)
Keep an eye open for trend setting releases “EUR/USD has been in a tight range for a while now. We expect to see this pair continue to move this way, but How long can EUR/USD be contained in this tight range? We believe it will remain there for this week but volatility can’t be shut down for much long. We must keep an eye open at all time so we can predict where the breakthrough will send the pair. Remember there are now external factors such as carry traders tending to move from USD/JPY to EUR and GBP. Lets be patient this week and try to take advantage of the few opportunities the market throws at us.” This is what we said last week and we think exactly the same for this one.
However this week has some releases that could increase volatility significantly, for example: Housing reports on Monday, Consumer Confidence for US on Tuesday and later that day IFO for UK. On Wednesday we will receive Current Account for Euro Zone and later we will see some releases for the USD, Durable Goods and an appearance by Bernanke are what jumps out the most. Thursday will bring Jobless rate for Japan and finally on Friday we will see Consumer Confidence for Euro and Personal Income for the US. As you can see there a few releases that have high relevance on the market but after several weeks of low volatility anything can detonate a move that will later transform into the trend we’re looking for.
The Technical side of trading will play a very quiet role this week. We find EUR/USD over the channels, it has been there for a while now, and will oscillate in a range between 1.3430 and 1.3230. Let’s take advantage of this range and get in and out of the market repeatedly so we can accumulate the last profits of the month.
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