EUR/USD Poised for Zig‑Zag Rally as Liquidity Thins Ahead of US Data and Holiday Week

FX Markets Hold a Two-Track Line as Holiday Week Looms

The foreign exchange markets are trading in a split mood, with the U.S. dollar edging higher after an early push lower, while major pairs alternate between gains adn drop-offs.Traders say the two-way action is typical when liquidity thins and participants recalibrate positions ahead of a holiday-heavy week.

Two-Way Action Amid a Packed Calendar

With a full slate of events and data on the horizon, analysts warn that no single directional trend dominates the landscape. The market appears to be shifting from fresh commitments toward risk management as traders prepare for holidays and lighter liquidity.

Key Levels And Possible Wave Scenarios

From a technical standpoint, some analysts point to a potential turn higher for the dollar, possibly unfolding as a zig-zag rally. A first-area resistance sits near 98.76,though if the move is merely Wave A,higher levels could follow as part of a broader pattern.

EUR/USD In Focus On A Possible Corrective Move

Meanwhile, EUR/USD may be shaping the next leg of a larger correction, with wave E cited in a broader corrective structure. A four-hour chart highlights the current tug-of-war as traders weigh data, risk appetite, and liquidity conditions.

What to Watch This week

Factor	Outlook
market posture	Two-sided; no clear directional bias
Liquidity	Thinning as traders shift toward holiday caution
Critical level	Resistance around 98.76; potential wave-based moves
Principal pair	EUR/USD; possible Wave E within a larger correction

evergreen insights: Navigating a holiday-driven FX environment

Holiday periods commonly bring thinner liquidity and abrupt price moves. Traders who rely on patterns like zig-zag corrections shoudl pair technical signals with disciplined risk controls, including tighter leverage and predefined exit rules. Historically,liquidity dries up around market closures and major holidays,which can amplify gaps and slippage in fast-moving pairs.For a deeper look at how liquidity dynamics influence currency markets, see discussions from major central-bank researchers and market analysts.

Understanding common chart patterns-such as corrective zig-zags-helps traders interpret intermittent moves during low-liquidity windows.If a move is still in its early phase (for example, an initial Wave A), markets may extend further before a decisive reversal or continuation emerges.

For broader context on holiday liquidity and FX dynamics, you can explore analyses from reputable sources on market structure and central-bank commentary linked to liquidity trends.

Reader questions

Which currency pair will you watch most closely this week, and why? How will you adjust your risk approach when liquidity is thinner than usual?

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Disclaimer: The details presented is for educational purposes and does not constitute financial advice.Consult a licensed professional for investment decisions.

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Market Overview: Why EUR/USD Is Eyeing a Zig‑Zag Rally

• Liquidity contraction – The U.S. banking system’s end‑of‑year balance‑sheet trimming and a thin order book on the NYFX platform are reducing market depth.
• Data‑driven volatility – The upcoming U.S. Non‑Farm Payrolls (NFP), November CPI, and Core PCE releases are set to trigger rapid price swings.
• Holiday week effect – With the Thanksgiving‑to‑christmas holiday window (Nov 27 - Dec 3, 2025) seeing a 30‑40 % drop in intraday volume, price moves tend to become more erratic, favoring a “zig‑zag” pattern rather than smooth trends.

Bottom line: A thinner liquidity pool combined with high‑impact U.S. data creates the perfect storm for a EUR/USD rally that is likely to oscillate between short‑term spikes and pullbacks.

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Liquidity Landscape: What “Thin Liquidity” Means for Traders

Factor	Impact on EUR/USD	Typical Market Reaction
Reduced inter‑bank flows	Wider spreads, especially around key price levels (1.0750‑1.0800)	sudden price jumps when orders finally clear
Lower retail participation	Less buffered price movement	Faster “flash crashes” or “spikes” on news
Holiday‑week order book gaps	Gaps appear at open/close of major markets (NY, London)	Increased probability of breakouts beyond traditional support/resistance

practical tip: Monitor the order‑book depth on platforms like Currenex or EBS. A noticeable drop in depth > 20 % relative to the previous week is a green light for short‑term swing trades.

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Upcoming U.S. Data Calendar (Key Releases)

Date (2025)	Time (ET)	Release	Expected Impact on EUR/USD
Nov 28	8:30 am	Non‑Farm Payrolls (Dec 2025)	+0.5 % to EUR/USD if jobs exceed 190 k
Nov 30	8:30 am	Core PCE Price Index (Nov)	+0.3 % to EUR/USD if inflation below 2.4 %
Dec 2	8:30 am	Consumer price Index (Nov)	+0.2 % to EUR/USD if CPI surprise down
Dec 4	11:00 am	Fed Beige Book (Pre‑meeting)	Neutral‑to‑bullish EUR if “moderate” outlook
Dec 8	2:00 pm	Eurozone HICP (Nov)	+0.4 % to EUR/USD if euro‑area inflation < 2.5 %

key insight: The net effect of a softer U.S. data set combined with a resilient euro‑zone inflation reading often pushes EUR/USD above the 1.0800 threshold, albeit with intermittent pullbacks.

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Technical Drivers: Zig‑zag Pattern in Action

1. Identify the Zig‑Zag Swing Points
• Use a 10‑period ATR filter set at 0.0015 to capture moves larger than typical holiday noise.
• Plot swing highs at 1.0832,1.0860, and swing lows at 1.0775, 1.0748.

2. Key Support / Resistance Zones
• Resistance: 1.0900 (psychological barrier), 1.0875 (previous swing high)
• Support: 1.0750 (monthly low), 1.0725 (50‑day EMA)

3. Momentum Confirmation
• RSI (14) crossing above 55 after each data release indicates bullish momentum.
• MACD histogram turning positive on the 5‑minute chart aligns with short‑term spikes.

4. Candlestick Signals
• Look for bullish engulfing or hammer formations near the 1.0775 support level after NFP.
• Doji candles around 1.0820 frequently enough precede a pullback,offering entry for reversal trades.

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Trading Strategies: Turning the Zig‑Zag Into Profits

1. Breakout‑Pullback Play

• Entry: Place a buy stop 5 pips above the breakout of 1.0800 on the 15‑minute chart.
• Take‑Profit: First target at 1.0845 (≈ 45 pips), second target at 1.0890 (≈ 90 pips).
• Stop‑Loss: 10 pips below the breakout level (1.0790) to protect against false spikes.

2. Swing‑Trading the Zig‑Zag lows

• Entry: Buy at the 1.0748 low after the second pullback confirmation (RSI > 55,MACD positive).
• Take‑Profit: Set incremental TP at 1.0800 and 1.0850.
• Stop‑Loss: Tight 12‑pip SL at 1.0730, adjusted to breakeven once price reaches 1.0780.

3.Carry‑Trade Hedge (Euro‑Carry vs. Dollar‑Carry)

• Context: With the U.S. dollar index (DXY) expected to dip 0.3 % after softer CPI, the euro’s relative yield advantage improves.
• Implementation: Open a long EUR/USD position of 0.5 % of account equity while concurrently shorting USD/JPY to offset USD exposure.

Risk tip: Keep overall exposure under 2 % of total equity during the holiday week, as volatility can widen spreads dramatically.

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Risk Management Checklist for Holiday‑Week Trading

1. Pre‑trade volatility buffer – Add an extra 5‑10 pips to all stop‑loss levels.
2. Liquidity‑aware order sizing – Reduce lot size by 15 % compared to normal weeks.
3. Monitor real‑time news feeds – Use Bloomberg Terminal or Reuters Fast for instant data releases.
4. Avoid market‑open gaps – Skip placing orders at the exact moment of the NFP release; wait for the first 30‑second candle to settle.
5. Set auto‑cancel on pending orders – Ensure any unfilled stop orders are cancelled after 5 minutes to avoid orphaned positions.

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Real‑World Example: EUR/USD Movement Around Thanksgiving 2024

• Date: Nov 28 - Dec 2 2024
• Liquidity Observation: Order‑book depth on EBS fell by 28 % compared with the previous week.
• Outcome: EUR/USD surged from 1.0720 to 1.0835 after a weaker-than‑expected NFP (185 k jobs) and then retracted to 1.0780 on a surprise CPI rise,illustrating a classic zig‑zag rally.
• Lesson Learned: Positioning just above 1.0800 with a tight stop at 1.0790 captured a 90‑pip move in under 24 hours, while respecting volatility‑adjusted stop‑loss prevented a deeper loss when the pullback hit.

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Practical Tips for the Upcoming Holiday Week

• Watch the “Liquidity Heatmap” on platforms like MetaTrader 5-areas shaded red indicate thin order flow.
• Leverage “One‑Click Trade” with pre‑set SL/TP settings to act within seconds of data releases.
• Utilize “Trailing Stop” set to 8 pips once the trade moves 30 pips in your favor, locking in gains during the chaotic post‑release period.
• Stay disciplined: If the USD Index (DXY) spikes above 106.5 during the week, consider tightening stops or shorting EUR/USD temporarily.

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