The EUR/USD has been fluctuating between constants levels of support and resistance ever since the beginning of the year. The most recent levels of support came in the form of the catalytic triangle, which is a three-day-old formation of the downtrend channel. On the weekly chart, this triangle is still present, but now it’s being tested at the 19,800 level. It’s worth noting that this level was tested on 6/29 and 7/2. In both cases, there was a “testing” phase where the EUR/USD found stability at this level. The uptrend in long-term view is back and the EUR/USD is likely to follow suit.
More stability for the EUR/USD
After a volatile start to the year, the EUR/USD has settled into a more predictable trading range. It’s been moving between constant levels of support and resistance, with the most recent levels of support being near the 50-day moving average. The uptrend in long-term view is evident once again, with the level of support near the 21-day moving average again serving as a strong support.
USD/JPY Holds at 101.84 After Test
The USDJPY has been relatively stable this week, with the latest exception being a small upward move that happened on the 23rd. It’s worth noting that the upper BollingerBand was tested on the 23rd, and the band failed to break above it. The pattern of higher highs and lower lows can be found in the 5- and 10-year charts, which are moving in similar directions.
More volatility for the EUR/USD
EUR/USD has been fluctuating between levels of volatility this week, with a build-up in short-term volatility leading to a drop in long-term stability. The daily chart shows that the volatility in the EUR/USD is at its highest point in 6 months, with the volatility of the long-term charts also showing a similar upward trend. In order for the EUR/USD to break out of the trading range it’s been in, it’ll first have to break above the moving averages.
How to Trade the EUR/USD
The best trading hours for the EUR/USD are generally found in the morning and afternoon hours. The best trading days of the week are Monday, Tuesday and Thursday. On the other days of the week, the trading range between the high and low is likely to be wide, making it difficult to trade profitably.
Most trading robots follow the S&P500, so it’s best to use that as your benchmark. For some trading robots, it’s best to set a trading range instead of a close. A good trading range is one that includes several close prices, so that you can watch for any changes in the price action and get a better indication of where to place your trades.
The EUR/USD has been stuck in a trading range for the majority of the year, and it could be weeks before we see the price action necessary to break out of this range. Even then, it’s important to remember that this is a short-term trend that could change at any time. What’s more, if this trend stays strong, the EUR/USD could easily breach the $1.20 level, which would mark a significant move higher in the European currency.
To cash in on this renewed volatility, short-term investors should look to sell their long positions in the EUR/USD and buy more conservative assets like the Swiss Franc and Norwegian Krone. Long-term investors should stay the course with their usual buying candidates including the USD, JPY and the RUB.