EUR/USD May Become Scalping Target Ahead of ECB Decision.

Key Technical Levels

Charts created using Strategy Trader - Prepared by John Rivera

The EUR/USD has settled into a tight 200 pip range between 1.2600 and 1.2800 with both bounds being reinforced by technical indicators. The 50.0% Fibo of 1.1875-1.333 at 1.2604 has proven to be a solid barrier and is limiting downside risks. Meanwhile, the 50-Day SMA at 1.2774 is helping cap upside momentum. An intra-day channel is developing which is providing target levels to enter and exit positions in addition to the other S/R levels.

Charts created using Strategy Trader - Prepared by John Rivera

Quantitative Metrics

The EUR/USD’s Bollinger band has widened to 891 pips placing it near the top of the moist traded pairs. However, despite its level of variance it only accounts for 1.09% of the spot price which increases its attractiveness as a scalping target. Yet, an ATR of 138 pips is enough volatility to make a high frequency trader uncomfortable. Additionally, we have seen one week implied volatility readings spike across the board as we face a week of significant event risk.

Charts created using Strategy Trader - Prepared by John Rivera

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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst at: jrivera@fxcm.com