EUR/USD's leap to 1.1240 on Dec.
31 sounds exciting, but any move at the end of the year, when nobody's around to see it, let alone trade it, must be treated with great caution nL1N29702Q.
The flows behind this move have been completed.
No news nor changes in fundamentals lay behind the rally.
To endure, traders who missed this rise must buy the top of the range on the back of the more bullish technical situation.
Some doubtless will, and added to likely short covering -- traders are short an equivalent $10 billion -- it's reasonable to assume EUR/USD will be underpinned in early January.
However, EUR/USD longs are expensive.
EUR/USD is just below its highest since mid-July.
It is still below the weekly cloud and interest rates still weigh.
For non-speculative traders, the dollar's cheap.
Volatility is still low.
Option traders don't expect a break and option barriers from 1.1250 up will be stoutly defended.
EUR/USD weekly Click here