EURUSD Remains Volatile Heading Up To Non-Farm Payrolls Within Defined Range
|The Euro has remained within a well-defined range over the past 6 trading sessions, with most of the price action between a low of 1.11529 and a high of 1.12471. That tight range has also include some very volatile days, such as last Tuesday when the market opened at 1.12105 reached a high of 1.12381, tested a low at 1.11371 to then close at 1.12039.
The market began to take on bets Tuesday that the Federal Reserve would raise interest rates sooner than later, probably this December meeting. While in the evening on the same day rumors emerged that the ECB will begin tapering the amount of assets it buys in its quantitative easing program. Bonds in the Euro area took a hit, but at the same time the Euro rallied and traded above 1.1200 for most of Wednesday.
More volatility may occur tomorrow when the US releases Non-Farm Payroll data for September. The markets have been watching this number closely as the Federal Reserve chair Ms. Yellen has repeatedly stated that job growth is one of their main metrics when considering the timing for an interest rate hike.
Data will be released at 1:30pm and is expected at 172k new jobs compared to last month's 151k. Any large deviations of this number from forecast may create volatility in the EURUSD.
If you feel that EURUSD will increase in price after the number is released then all you need to do is buy EURUSD with Deal Cancellation protection. This feature allows you to take a position and set up a maximum stop loss, which if hit during the first hour, will only cost you the premium you paid to buy Deal Cancellation protection.
Deal Cancellation gives you the option to close a trade, during 1 hour, losing no more than the premium you paid, while allowing you to gain from any positive movement. The screenshot below shows that to sell €35,000 with a stop loss of €312.13 would cost €15.91 to gain Deal Cancellation protection.
If the market falls from 1.12117 you would be able to close your trade with a profit less the cost of the Deal Cancellation protection. Let's say price declines to 1.11317, your profit would be equal to €280 – €15.91 = €264.09, while your maximum risk for one hour would be €15.91.
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