The EUR/USD delivered a solid trading range for speculators the past week, and this coming week could see more consolidated price action because of the holiday season. Traders of the EUR/USD have to acknowledge that Forex volumes will be light this week and until the end of the New Year’s holiday. The EUR/USD finished the past week with thin trading but did have a value around the 1.06260 ratio, which is a higher price than it started the week near the 1.05960 mark.
While the EUR/USD did not come close to challenging the levels it hit in the middle of December, the price range of the EUR/USD was able to sustain important support ratios. The low for the EUR/USD was on Thursday and close to 1.05750 realms, which had come within sight also on Monday. However, the lowest value for the EUR/USD did not become overly violent, and it occurred on Thursday with light holiday trading volumes already happening.
Traders participating in the EUR/USD this Week should consider quick Hitting Wagers
If a day trader insists on participating in Forex this coming week, the EUR/USD may have enough value to still pack a punch regarding price action. However, speculators need to be ready for what could prove to be quiet markets, and they may want to use narrow their take profit targets with slightly larger stop-loss ratios. The price momentum of the EUR/USD in the coming days might not correlate to technical results seen the past month because of the absence of large institutional traders.
The bullish momentum of the EUR/USD has weakened in the past ten trading days, but this might be a combination of the holiday season and the perception the currency pair was traversing highs that were too optimistic. Economic data this coming week will be light due to the holiday season, so traders need to rely on the behavioral sentiment which will be generated by the price daily gyrations. A large EUR/USD transaction that comes into the market could cause a flash of volatility.
- Having touched a low of nearly 1.05750, the EUR/USD may create this level as an important support in the coming days. However, thin holiday EUR/USD trading may test the patience of day traders.
- Traders who do wager this week should look for quick-hitting results with limited goals, to avoid having to wait for a result that may take too long to generate, and translate into expensive overnight charges.
EUR/USD Weekly Outlook:
The speculative price range for EUR/USD is 1.05650 to 1.06790
Some traders may feel that the EUR/USD has been oversold and this may prove correct eventually. However, trading conditions this week could be very light and not reflect the true sentiment of the Forex market. The EUR/USD could dance in the same range without large price moves because of light volume in the short term.
If the EUR/USD sells off incrementally this may attract traders who have a bullish perspective of the currency pair looking for reversals higher, but speculators may be relying on financial institutions which may not be participating in the Forex markets this week. Meaning looking for technical bounces off of lows may prove dangerous in the coming days. Support for the EUR/USD should be watched near the 1.06000 level, if it holds this could be a solid bullish indicator near-term.
Traders may want to simply watch the trading action of the EUR/USD when it begins trading in earnest on Tuesday and survey the results for a handful of hours. The light holiday trading will certainly be displayed and some volatility could occur in the opening hours. Sudden gyrations in the EUR/USD this coming week should not be unexpected and risk-taking tactics need to be chosen well.
