Currency market: EUR/USD price path

EUR/USD opened the week at 1.0556, dropped to 1.0547 then traded highs to 1.0614. Highs at 1.0614 were located from 1.0599 to 1.0654. What is 1.0614? A phantom number and without EUR/USD ability to at least touch or trade closer to the next average.

EUR/USD price path for the week traded 1.0547 to 1.0614. EUR/USD traded from neutral to neutral and at 1.0556 also traded a  neutral price. Despite 67 pips from 1.0547 to 1.0614, its impossible and not smart to trade a neutral price nor to trade neutral to neutral. And for 60 pips? Neutral refers to price ability to trade up or down. its a coin toss which direction the price may trade.

EUR/USD then traded from 1.0614 to 1.0485 lows. Now our EUR/USD traded from neutral highs to neutral lows. What's neutral? Depends how its viewed. At week's beginning, 1.0481 classifies as neutral. Today 1.0494

The EUR/USD reference pertains to the weekly price path and trade and excludes day trades. Correct for EUR/USD this week and a correct price path is to drop from 1.0556 neutrality to provide an entry for longs. This is fairly common for all financial instruments as a market price spends most of its trade life in neutrality.

Take EUR/USD's day trade for example. From 14 exchange rate points only 4 exchange rates are valid for entries to longs and shorts. The remainder exchange rates are untouchable for entries as all are classified as neutral.

The weekly price path is no different. While many more than 14 exchange rates trade, only 4 exchange rates are valid for entries. Note 4 as the commonality. A weekly trade is a day trade X 2. Best bet to trade and view overall price paths is to factor trades in 50 pips increments. This concept will maintain profitability and free traders from the savages.

Only today is a long completely justified as written in the weekly from 1.0498. Actual is 1.0512 and 1.0498. If EUR/USD traded to target at 1.0653 instead of 1.0614 then shorts would become valid. But the target price to achieve inside a neutral price path is impossible.

More important is 67 pips and neutral trading leaves EUR/USD in severe range compression mode. Note the points of neutrality 1.0481 and 1.0494 or a difference of 13 pips after 3 full trade days. The highlight to compression is 13 pip changes to averages after 3 trade days. Yet how far can an average change under a neutral price path. Not much.

The same range compression is seen from day trades. Today's vital points are located from 1.0441, 1.0554, 1.0519, 1.0539,  1.0546. A Price path to weekly amd day trades is factored for specific points along the way for entries and targets.

if EUR/USD traded to target at 1.0653 then we have a price path operating in reverse. This is a rare day and not normal to price paths.

Overall, EUR/USD from 1.0614 to today's 1.0494 or 120 pips traded in neutrality. Lows achieved 1.0486 and longs from 1.0498 to highs traded so far to 1.0529 or 30 pips. As EUR/USD's price path began its correct normalization, target remains 1.0653.