The quiet market conditions due to the absence of an essential catalyst at the end of the year made the EUR/USD moves choppy. However, there are two trading scenarios that can still be used.

Hi fellow traders! EUR/USD has so far been seen moving uncertainly. In recent weeks, EUR/USD is moving in a limited range because of the lack of catalysts that can drive the market during the year-end holiday season. The daily trading bias remains bullish, and the choppy market situation is able to create two scenarios.

eurusd

 

Analysis and Recommendation

Let's take a look at the following EUR/USD H4 chart below: 

eurusd 2

Based on the H4 chart above, it has been pointed out that EUR/USD has been moving in a narrow range for more than a week. The lack of catalysts and drastically reduced volatility made this pair only fluctuate between the demand zone of 1.0550–1.0500 and the supply zone of 1.0675–1.0740. Scenarios you may try are open long on demand or short on supply, as long as that price will continue to move between those zones.

  • Therefore, set a short position at 1.0675 when the price manages to enter the supply zone and there is a rejection or bearish signal confirming it. Stop loss may be positioned at 1.0740, while the profit target on 1.0550.
  • Alternatively, a long position can also be taken when the price tests the demand zone. Open long is placed around 1.0550 when there is a rejection or bullish signal in the demand zone. Stop loss can be positioned at 1.0500, while take profit is at 1.0675.

Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!

EUR/USD key levels: 

  • Resistance: 1.0740, 1.0675
  • Support: 1.0550, 1.0500 (psychological levels)