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EUR/USD heads towards another test of bids near 1.13

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Option-related bids near 1.1300 to provide additional support


It’s going to be a very trick day for EUR/USD. Not because we’re nearing a test of a key support level but more so the fact that we’re closing in on that level in what will be a couple of sessions with thin liquidity. On days like these, price action tends to be a little jumpy and all it takes is a little skip and we could see price running away to the downside once 1.1300 gives way.
There are still barrier options sitting there which is helping to provide some additional defense for buyers but as mentioned above, thin liquidity conditions tend to make markets a little bit erratic.
If price starts to track below 1.1300, expect the move lower to pick up some momentum and price should be a little “leaky” as liquidity will be thin. But it’s hard to read any solid moves from a break here considering that US traders will be away.
Either way, expect a break below 1.1300 in EUR/USD to give the dollar added momentum across the board and the greenback will surge in holiday-thin trading as a result, but for added confirmation of a break, we have to rely on tomorrow’s price action for further clues. Though on the flip side, the thin liquidity session may yet prove to be the opportune moment for sellers to finally drive a move lower that will continue for the sessions to come.

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