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Oct 11 - 07:55 AM

EUR/USD - COMMENT-It May Be Prudent To Hedge For A Higher EUR/USD Range

By Jeremy Boulton  —  Oct 11 - 05:45 AM

It may be prudent to hedge for a higher EUR/USD range with a rise from the 1.04-1.11 area that has seen the bulk of trading volumes since the beginning of 2023.

While speculators may continue to gamble on a move higher, as has been their preference since October 2022, those who are seeking to reduce the risk posed by currency moves might focus on the pair trading in higher ranges.

The emergence of important lows above 1.0600 is one reason to pick a higher base with the lows at 1.0601 in April and 1.0666 in June, a step up from key lows last year which unfolded closer to 1.04-1.05.

This year's lows were shaped by the presence of the 100-WMA which has since risen to 1.0820.
EUR/USD hasn't closed below the 100-WMA since October 2023, and it could help to define a substantially higher base following the rise to this year's high at 1.1214 in September.

This year's high is slightly below last year's 1.1276 peak, while 1.1221 is the 61.8% retracement of losses that resulted from the U.S. tightening cycle, so a move beyond 1.13 may well result in a rise toward 1.1680-1.1750.

It is worth considering the development of a 1.08-1.12 range where the base is shaped by the 100-WMA, while the area where most trading volumes occurs rises to 1.06-1.13 from 1.04-11.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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