By: Doug Rosen
Yesterday was not a very volatile day for this pair and I don't expect today will be either. sometimes, the winning trade is to not trade. I love to trade and I am always obsessed with finding a position, an entry position into the trend. But I like to trade on volatility. I like to enter the move and in less than 5 minutes already be up 10 - 15 pips or more. The current market conditions can be very frustrating.
Yesterday's range for the EUR/USD was only 41 pips, that is only a third of the norm. The previous 4 hour range was only 11 pips, the previous hour and 15 minute ranges only 1 pip (see Doug's Matrix). This is all based at the time I am writing this analysis.
As for news announcements there is only one for today, its Swiss news and it is an important one and I will be very curious as to how much it will move the market, however, I will be on the sidelines just as an observer. Correlations area at a bare minimum as well, the strongest correlation to the EUR/USD is Silver as of today. So, I will be quick today.
As I have pointed out this week price is gapped below the 5 ema on the weekly timeframe and price is in mid-air. When I say mid-air I mean price has no dynamic support or resistance close by on the weekly so there is nothing that can cause this pair to move.
On the daily timeframe price is right on a support line and making a series of higher lows so a drop and close below 1.3045 will confirm a down day. There is nothing really pressing down on the daily candle to push it below support so a rise to the upside is more than likely. A move up to the daily 21 ema at 1.3156 is very realistic.
On the 4 hour timeframe the Bollinger band is very narrow and the ema's are all bunched together.
On the hourly timeframe I see the lower Bollinger band is also narrow but slightly opening up to the downside with the 5 ema crossing below the other ema's but this can just be purely incidental of transactions being placed or just a Pre-London fake out to shake up the market.
So, as I said earlier, breaks below 1.3045 think bearish, otherwise think bullish but be careful if trading this pair today since volatility is at a bare minimum.
