Holiday Volume Makes EUR/USD Target For Scalpers

The Columbus Day holiday could lead to thinning volume and dissipating volatility as we make our way through the trading day. Therefore, several pairs may set up to provide scalping opportunities. The EUR/USD could be the most attractive as its popularity should offer the lowest spreads and it has other technical factors to support its selection.

[B]Key Technical Levels[/B]

We saw early volatility from the EUR/USD which may scare off some traders, but the pair has already exhausted its daily Average True Range (ATR) which reduces the chances of any large price swings going forward. Additionally the pair may look to consolidate as it is approaching trend line resistance with the yearly high of 1.4846 not far above.

[B]Quantitative Metrics [/B]

The EUR/USD stands as an attractive pair for scalpers on its own with one of the lowest ATR’s and it accounting for only 0.81% of the current spot price. A narrow Bollinger band width of 284 bps and an implied volatility of 8.99 also enhance its attractiveness for scalpers. However, be conscious that if the Bollinger band becomes extremely narrow it could give way to a breakout.

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[I]To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: <[email protected]>[/I]