Action across the forex is extremely limited today. Among the tightest markets is the EUR/USD, posting a tiny 18 pip trading range for the session. At this point, all eyes are firmly on the forthcoming announcement of the U.K. Prime Minister and Brexit proceedings.

Currently, Boris Johnson is an overwhelming favorite to win the Prime Ministership over Jeremy Hunt. This has currency traders exercising caution, as Johnson has gone on record with a more hard-line approach toward the U.K. departing the E.U. For now, forex players are taking a wait-and-see stance on the EUR/USD.

EUR/USD Enters Consolidation

Trading doesn’t get much slower than today’s EUR/USD market. However, this is the calm before the storm ― a directional move in the next 36 hours is highly likely.

Here are the key levels to watch going into the Tory party vote tally during the coming U.S. overnight session:

• Resistance(1): Daily SMA, 1.1241
• Resistance(2): Bollinger MP, 1.1280
• Support(1): Swing Low, 1.1193

Bottom Line: Until the results of the Tory vote become public, I will be looking to scalp the Daily SMA to the short. Sell orders from 1.1237 with an initial stop at 1.1252 produce a tidy 8-12 pips profit on a slightly sub-1:1 risk vs reward management plan.

Be on the watch for sudden volatility surrounding the announcement of the new U.K. Prime Minister. While price action should bring us some opportunity, it will be important to have your stops down and leverage in check amid the super-charged news cycle.