ForexSpirit

If any proof were needed that trading is not all excitement and non-stop action then last week in EUR-USD would certainly suffice. Up until the commencement of Friday’s New York session price had traded in a very narrow 65 pip range. Even the final weekly range of 94 pips is equal to the previous narrowest weekly range ever experienced by the pair.

Even with the very low volatility the euro finished on top showing strength going into the weekend as price closed out on Friday at the high for the week.

At the beginning of the week I had set a profit target on my 1.3397 entry of just 35 pips; a regular bread and butter target. After the slow and steady euro strength on Monday I revised my profit target on this trade up to 50 pips. It was going to a long waiting game before that profit target got hit.

My original profit target of 1.3433 was hit on Tuesday morning and Wednesday. If I had kept my original profit target I could have reopened the trade at its original price of 1.3397 Wednesday morning after the poor German ZEW number. I could have done that same trade three times during the week; just playing the range. I could have gotten 105 pips in total from those three hypothetical trades. Instead I had to stick to my change in plan and settle for the 50 pips in profit I received when price finally hit my revised target of 1.3347.

I was all ready to play the range trading game for the week but the range was just too tight.

Was it a mistake to have gone for a 50 pip target? It wasn’t exactly foolishness as price got there in the end. It just seems to be unfortunate that I didn’t get to take advantage of the range trading that took place all week due to the low number of economic data releases and lack of other real market moving news.

This coming week should be back to normal on the volatility front, as we have US home sales on Monday and Tuesday, US durable goods on Wednesday and the Fed interest rate decision on Thursday. PCE and Chicago PMI rounds out the US data on Friday. Europe also has a fair few economic data releases this week, with the European current account on Tuesday, and M3 money supply and retail PMI on Thursday.

The US home sales and consumer confidence data early on has a good chance of setting the tone for the rest of the week up until the Fed interest rate decision on Thursday afternoon.

With sterling looking to break back above the psychologically important 2.0 level, there’s a good chance that euro will ride the wave upwards. 1.3550 is certainly within reach, but I think 1.36 is going to prove difficult to reach, at least until any lingering dollar strength is put out of sight.