### The Euro’s Range Trading Phase Current price trends show no major shifts in momentum. Therefore, in the coming days, the Euro will likely stay within a narrow price range. Key points to consider are the US Dollar’s decline, which is fueled by positive trade deal outlooks with China and recent decisions on interest rates by the Federal Reserve. Gold has also faced pressure, dropping to about $4,000 due to changing risk sentiments in the market. This overview is for informational purposes only and does not serve as investment advice. All market activities involve risks, including potential significant losses. It’s crucial to do your own research before making trading decisions. In the upcoming weeks, we expect the Euro to trade sideways within a range of 1.1585 to 1.1680. The downward momentum seen earlier in October has lessened, indicating that the market is now consolidating. Last week’s price movements confirm this, as there were no significant changes in either direction. ### The Economic Context This market stability arises from economic data on both sides of the Atlantic that provides no clear direction. Recent US Core PCE inflation is near the Federal Reserve’s 2% target, while the latest flash CPI from the Eurozone shows consistent but not accelerating inflation. This puts both the Fed and the ECB in a cautious stance, reducing a key factor for currency volatility. For those trading derivatives, this environment suggests it’s better to sell volatility rather than focus on directional trades. Implied volatility on one-month EUR/USD options has dropped to levels not seen since this summer, showing that the market expects limited price movements. Thus, strategies that benefit from time decay and range-bound trading are particularly appealing. We suggest using strategies like short strangles or iron condors for the current market situation. By selling out-of-the-money calls and puts with strike prices beyond the expected 1.1585-1.1680 range, traders can gather premiums. These strategies will profit as long as the EUR/USD pair stays within this range and volatility remains low. However, caution is advised. Unexpected comments from central bank officials could disrupt this calm. Historically, low-volatility periods, such as in 2021, can end suddenly. Therefore, it’s essential to manage your position size and establish risk parameters for these options strategies. Create your live VT Markets account and start trading now.

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