The previous week for the EUR/USD has been a difficult one in terms of directional volatility. There is a general lack of conviction in prices. Lower lows have been attempted at the 1.3050-60 area, but can not be sustained. We still have another week of holiday action so the best thing to do in my opinion is avoid trading this pair until it makes a decision. Remember we are “listening” to the market, not predicting. The levels to watch for during the upcoming week are as follows: Any break above 1.3170-80 area that is sustained, meaning price trades into the 3200′s and stays there would imply bullish momentum which can take the price into the 1.3250 – 1.3300 area. Any break below the 1.3050 area can take the price to the 1.2950 area which is a major swing low support. When these price breaks occur, look for price to sustain these breaks by spending a considerable amount of time outside of the break-out levels. Minimum is 4 hours. Overall, don’t expect too much follow-through during the week. Volume is low all around and this is a common characteristic of tight range-bound markets that cause a great deal of frustration for swing-traders. Consider taking the week off, enjoying the holiday and conserving your energy for the start of a new year.
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