Dollar Stength and EUR/USD Weakness in a Volatile, Sideways Range

The market’s dealing with two sharp moves today as risk aversion takes hold of traders to start off the week.

The fact that two markets in distribution (the daily dollar and EUR/USD) are trading into their potential exhaustion areas makes today’s price action all the more important and brings up this question: How much potential for follow-through is there? AND when could that follow-through occur?

Partly my continued response is to keep my focus on the shorter-term, intraday time frames in an effort to stay nimble in this confused market environment and also to allow me enter trades that do not require a longer-term expectation of organized sentiment and momentum. Dya to day, session to session we’re simply not seeing that.

There are a number of key levels to consider in play today and those are the 1.4100 in the EUR/USD and the 76.50 level in the U.S. Dollar Index.

The timing of volatility will be very important as well to traders looking for follow-through and insight into price action and future direction. Take a look at the Movement Per Hour graph below, this is a study in price movement ranges and volatility.

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PowerStats Price Movement Ranges and Movement Per Hour provided by Autochartist.

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