Slow Mid-Week Trading Plagues The USD - FX Leaders News
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Slow Mid-Week Trading Plagues The USD

Posted Wednesday, August 8, 2018 by
Shain Vernier • 1 min read

Mid-week has brought muted trading conditions and moderate action across the forex. Thus far it has been a mixed bag for the Greenback. Losses against the Euro and Swiss franc have been offset by gains vs the Canadian dollar and British pound. The economic calendar is wide-open and volatility has been low.

During the U.S. pre-market hours, the MBA Mortgage Applications for August was released. Applications continued to fall, coming below July’s stats at -3.0%. U.S. Real estate metrics have consistently underperformed during the summer months. With 4.1% GDP and historically low Unemployment, one is liable to believe U.S. real estate to be strong. And it is — just not as strong as expected.

EUR/USD Daily Technicals

In a live market update from yesterday, I outlined the key levels for the EUR/USD. Since then, price has tested and failed at topside resistance. Unfortunately, the trading plan was a loser, with the stop being run by two pips before reversing beneath 1.1600.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

It appears that the vacant economic calendar and slow trading conditions are promoting a rotational EUR/USD. Until Friday’s U.S. CPI release, I expect this market to trade between the 38% Current Wave retracement (1.1612) and the June/July Double Bottom (1.1510).

Bottom Line: If the EUR/USD fails to sustain trade above the 1.1612 area, then we are in a position to test the Double Bottom just above the 1.1510 handle.

For the remainder of the week, I will have buy orders queued up from 1.1512 to capitalize on a rejection of the 1.1500 psychological level. With an initial stop at 1.1474, this trade produces 38 pips when implementing a 1:1 risk vs reward plan.

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About the author

Shain Vernier is our US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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