The Euro is projected to trade within a range of 1.1640 to 1.1700. Recently, its weakness has stabilised, and it’s anticipated to consolidate between 1.1615 and 1.1730 according to UOB Group’s analysts.<\/p>\n
In the previous 24 hours, expectations were set for the Euro to consolidate between 1.1615 and 1.1665. Contrary to these predictions, the Euro rebounded sharply to a peak of 1.1698. This rebounding movement seems overly rapid, and further significant upward movement is not expected in the immediate term.<\/p>\n
In a one-to-three-week view, the Euro experienced a drop to a low of 1.1617 last Friday. Analysts noted the necessity for it to close below 1.1615 to proceed towards 1.1585. However, the Euro unexpectedly rose above the strong resistance level of 1.1690, peaking at 1.1698. This indicates that the earlier decline has stabilised, and the Euro has now entered a consolidation phase. It is likely to maintain a trading range of 1.1615 to 1.1730.<\/p>\n
Based on the view from early last year, the signal was that the downward pressure on EUR\/USD had eased. This stabilization suggested a shift into a consolidation phase, making it a good time for us to consider selling volatility. We understood this to mean the pair would likely trade between 1.1615 and 1.1730 for the next few weeks.<\/p>\n
Looking back at the data from that time, this view was supported by the macroeconomic environment of late 2024. Both the European Central Bank and the US Federal Reserve had signaled a pause in their rate-hiking cycles, removing a key driver of currency volatility. This policy convergence created a backdrop where neither the euro nor the dollar had a strong directional catalyst.<\/p>\n
Inflation figures from that period also reinforced this outlook for us. For instance, Eurozone HICP inflation had cooled to 2.8% by December 2024, while US CPI was down to 3.1%. These moderating figures eased pressure on central bankers to make sudden policy moves, further supporting a range-bound market.<\/p>\n
For traders using derivatives, the play was to sell short-dated option strangles or iron condors. This strategy profits from low volatility and time decay, which was ideal if we believed the pair would stay within the identified 1.1615-1.1730 range. Indeed, the one-month implied volatility for EUR\/USD at that point in January 2025 had fallen below 6%, making option premiums relatively attractive to sell.<\/p>\n
The breach of the 1.1690 resistance level was the key trigger for us to stop looking for further downside. This technical shift confirmed the consolidation phase and gave us confidence that selling puts below 1.1600 would be a relatively safe way to collect premium. The strategy was to let the options expire worthless as the currency pair stayed within its predicted channel.<\/p>\n","protected":false},"excerpt":{"rendered":"
Euro stabilizes after rebound; expected to consolidate in 1.1615\u20131.1730 range, says UOB Group analysts.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39009","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39009","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=39009"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39009\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}