It is becoming very clear that traders and investors are placing a great deal of emphasis on today’s tax reform vote in the U.S. House of Representatives. The indices are still in the red, led by the DJIA down 50 and the S&P 500 off seven. The forex majors have also traded in a tight range during the U.S. session.

Crude oil is up moderately, while gold has fallen. It looks as though we may be in for some late day fireworks following the 1:30 PM EST tax reform vote.

EUR/USD Technicals

Active trading around the holidays is always a challenge. Many of the big money players have already left the market in favor of vacation, influencing liquidity greatly. Today’s action in the EUR/USD is a prime example of a pre-holiday tight trading range.

For now, the EUR/USD is in a heavy rotational pattern. Price is non-committal, in the center of November’s range. Here are the support and resistance levels for the remainder of the session:

• Resistance(1): Daily SMA, 1.1842
• Resistance(2): Last week’s high, 1.1862
• Support(1): Bollinger MP, 1.1793
• Support(2): 20 Day EMA, 1.1792

Bottom Line: In such a tight market, selling resistance and buying support is an affordable way to capitalize upon a mean reversion strategy. Profit targets must be modest, but a short scalping plan from the Daily SMA area around 1.1842 will be good for 8-15 pips using a 1:1 R/R management scenario.

There just isn’t a lot of participation across the markets currently. If you are going to become active, keep the targets modest and stops tight!