EUR/USD elevated volatility could bring trading bias

Note: This section contains information in English only.
Source: Dukascopy Bank SA
The decline of the EUR/USD has stopped as the Dollar strengthened throughout the week. The 1.0500 mark was reached and acted as support. Sideways trading has been ongoing for quite some time.

In the meantime, the 50-hour and 100-hour simple moving averages are within the previous week's FX rate range, thus creating a higher probability scenario for a reversal if market conditions allow for such a situation.

Economic Calendar Analysis


Higher than usual volatility can occur this week due to economic calendar activity, mainly form the U.S.

Fed interest rate decision and GDP numbers should bring the highest levels of volatility, additionally unemployment claims number should bring some clarity.

EUR/USD hourly chart analysis

The EUR/USD pair has been trading around 1.05000 price level, although this week could bring elevated levels of volatility, no significant price action could be taken into consideration.

A decline in the FX rate is possible, as the simple moving averages on the hourly time frame suggest the FX rate is currently trading around these levels. If the 1.05000 support is broken, further price movement towards the 1.04620 level is plausible, along with the continuation of the downward trend.

Hourly Chart

EUR/USD daily chart's review

On the daily candlestick chart, the simple moving averages are significantly above the current FX rate. A price of 0.98 could be a possible level if sudden geopolitical changes occur. The EUR/USD pair has been trading around the 1.05000 price level. This week could bring elevated levels of volatility. The Fed's interest rate decision should bring significantly higher levels of volatility and trading bias for the market, but only if the Fed's decision deviates from the market consensus forecast.

The ongoing decline could possibly continue if dollar strength rises in the broader market.

Meanwhile, a potential recovery will face the 1.0726 level and the 1.0726/1.0770 zone.

Daily chart




Traders stick to long positions




Current trader sentiment sugessts mayority of traders are anticipating recovery of the EUR/USD recovery towards higher price levels.

This week, traders had added to the long positions, as 69% were already long, 31% short. Everyone appears to be expecting a retracement back up.

Elevated volatility in the EUR/USD pair can significantly influence trading bias, driven by factors such as economic data, central bank decisions, geopolitical events, and market surprises. In volatile markets, traders often follow price trends, using momentum strategies to capitalize on rapid price movements. This can lead to a trend-following bias. However, volatility can also cause sudden shifts in market sentiment, creating bullish or bearish biases based on expectations of central bank actions or economic news.

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