Despite recent volatility, EUR/USD may still provide an ideal environment for scalping strategies as the pair continues to see its Average True Range (ATR) narrow. The pair has had nine consecutive days with a daily candle within 150 pips limiting risk for high frequency traders.
[B][U]Key Technical Levels[/U][/B]
The EUR/USD was trading in a tight range before the recent bout of dollar strength as we can see in the chart above. The pair could see a return to the concentrated pattern with broader volatility dissipating. Euro/Dollar has been prone to settle into periods on condense trading over the past few months. Recent trading has seen it start to give back a portion of its recent gains after establishing a fresh yearly high. However, dollar strength has been fleeting and with the FOMC rate decision looming we could see another period of consolidation begin to emerge.
[B][U]Quantitative Metrics[/U][/B]
The strongest case for trading the EUR/USD using scalping strategies is its declining ATR which currently stands at 122 pips. Despite, it residing in the middle of the pack on an absolute basis, it is the lowest percentage of spot of any of the pairs listed below. The Euro/Dollar also has the lowest implied volatility at 9.60 which makes it the only major below 10.00. Additionally, its high volume produces low spreads which is critical for capturing small profits.
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[I][B]To discuss this report contact John Rivera, Currency Analyst: <[email protected]>[/B][/I]