Despite the big data releases out in the last 24 hours, the EUR/USD has been relatively consistent. After tagging 1.2500 last week, price has really just pulled back and is now consolidating below the highs.

Looking at the chart we can see that we are now in a trading range between the highs of 1.2500 and 1.2360. In much the same fashion, the US Dollar Index (DXY) is also in a consolidation period after it had been on a strong downtrend.

That said I still expect the longer-term trend to continue. So for the EUR/USD I will be using this period to look for buying opportunities. At the moment I’m interested in the bottom of the range at 1.2360.

1.2300 is the all-important support level. It was previously the area that was offering up quite a bit of resistance so I would expect us to see the same level of support.

Trade Idea

Using those levels we can construct a trade with a target of 1.2500, stop at 1.2300 and entry around 1.2360. However, I would be giving a bit of room on either side. If we get to 1.2300 I would think that we might run through it a little.

Of course, I will be watching the events of Friday very closely. It might be worth waiting to see how the USD reacts to the non-farm payroll number prior to entering any trades.