Whether betting on or trying to hedge EUR/USD moves, traders will probably do well by seeking a continuation of the rough 1.1500-1.1800 range that has held since the end of May.
A big gap in interest rates means those who sell strength should ultimately be better rewarded.
The forward swap based on the rate gap will add roughly 30 pips per month to the average rate of those who sit short EUR/USD.
That said, despite this big and growing rate gap, EUR/USD has been stable for a long time, and for almost 18 months speculators have bet on a EUR/USD rise.
To break that bullish speculation or to reward it, and therefore spark an escape from ranges, bigger change in thinking for U.S. or eurozone rates is needed.
That's not going to happen until December, when the European Central Bank is expected to end quantitative easing, putting its first hike more into focus, and the Fed is expected to raise rates again.
EUR/USD daily Click here