The EUR/USD has gone quiet ahead of Thursday’s European Central Bank (ECB) release. With a wide-open economic calendar facing both the Euro and USD until then, traders are electing to watch from the sidelines. Aside from tomorrow’s U.S. housing data and Markit Manufacturing PMI, there aren’t a whole lot of fundamentals to bolster volatility.

Coming releases from the ECB (Thursday) and U.S. Federal Reserve (next Wednesday) will dictate the intermediate-term pricing of the EUR/USD. Experts are projecting that both rates are to remain unchanged at -0.4% and 1.5%.

Of course, any surprise moves by the central banking authorities will create chaos and force the markets to adjust accordingly.

EUR/USD Technicals

For now, it appears as though the dust from the early 2018 bull run in the EUR/USD is beginning to settle. Market conditions are rotational near the 1.2300 handle.

Since the four-session bull run beginning on January 10, the market has entered a consolidation phase. Price remains firmly above the 38% retracement of the move, preserving my bias to the upside.

There are two important levels to watch for the near future:

• Resistance(1): Swing High, 1.2322
• Support(1): 38% Retracement of Bull Run, 1.2167

Bottom Line: After observing the limited levels of participation over the past week or so, it is difficult to see price breaking out from current areas of support and resistance. We are likely in a holding pattern until the ECB release on Thursday.

However, a tight 1:1 R/R short scalping strategy from 1.2319 can be an affordable way to play rotation. With an initial stop of 10-12 pips, this trade is a good way to capitalise on price stalling near topside resistance.

Remember, when scalping we are looking for an immediate and positive move in price action. If the market does not provide these items, consider making an early exit!