EUR/USD
Thursday, December 13th, 2007The Fed said yesterday it will make up to $24 billion available to the ECB and SNB to increase the supply of dollars in Europe. It plans four auctions to add as much as $40 billion of cash in the U.S. This announcement was intended to calm down the markets, but actually it caused more volatility. Probably it will take at least a few days for the market participants the assess what exactly happened yesterday and what will be its long-term impact. Until then the volatility will probably persist, helped additionally by thin market conditions in the last month of the year. Most of the small or novice traders will be better off if just watch the price action and gain more experience.
The EUR/USD currency pair is still confined between the broken uptrend line and the upper boundary of the flag formation. Even the higher volatility yesterday couldn’t help to find a direction. Today I picked 1H chart where we can see clearly the support level @ 1.4640 and the resistance @ 1.4750. One of these two levels should be broken for finding the next direction of the forex market movement. Until then we can play the range by buying at the support and selling at the resistance with tight stops.