The upcoming U.S. Non-Farm payroll report is usually preceded by a period of low volatility. Given the importance of tomorrow’s release with the lingering questions over future consumer consumption, we could see similar price action. Therefore, several pairs may present an opportunity for scalping strategies including the EUR/USD. Its popularity and lower spreads makes it the favored for these types of situations.
[B]Key Technical Levels[/B]
The 20-Day SMA has been an anchoring force for the EUR/USD and we currently see the pair trading near the technical level again. Therefore, price action may settle into range which could make it a pair to target on a longer-term basis. However, we did see considerable volatility today and high frequency traders should limit their time frame to prior to the event risk as there could be a sharp increase in volatility following the print.
[B]Quantitative Metrics[/B]
A narrowing Bollinger band and declining ATR adds to the attractiveness of the EUR/USD for scalpers. The pair’s Average True Range (ATR) is the smallest percentage of its spot price of the pair listed below. Additionally, at 10.14 it has the lowest implied volatility of the majors. However, recent volatility has seen an increase in the ATR and at 699 bps the Bollinger Band width is a sizable amount.
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