EUR/USD's failure to break out has one likely outcome
Nov 20 (Reuters) -EUR/USD's failure to break out on both the upside and the downside in the last few weeks may well result in a return toward the middle of recent ranges.
September's rally failed 62 pips before 2023's high at 1.1276 while November's plunge stopped 48 pips shy of last year's 1.0448 low. Both moves impressed speculators who ploughed money into bullish bets before turning short, and traders also turned to options to cover the risk of bigger moves, with volatility almost doubling as a result of their hedging.
As a consequence, traders are much better prepared for bigger moves, which have not been seen since 2022, and those now short are being frustrated by a rebound that reached 1.0610 on November 20.
EUR/USD, overbought when it peaked in September, was oversold when it based last week, and the chart formation where the weekly Ichimoku cloud twists near 1.0800 at the start of 2025 is a concern, because twists often attract.
Traders had good reason to cover the risk of a drop and equally good cause to fear a rise a few weeks ago. But they may instead see a return of the status quo as EUR/USD heads back toward 1.0750 - the midpoint of the area where most trading has occurred for two years - or 1.0855, which is the centre of this year's range.
For more click on FXBUZ
EURUSD https://tmsnrt.rs/4eUBcDf
(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
</body></html>Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
