Why are we not moving? Usually when a market like EUR/USD stops falling, it turns around and rallies, leaving a trail of tears in its wake. Not so this time. Why not?
My guess is the market got it self good and long options. If you’re not sure which way the market is going to move, you can buy both puts and calls, essentially betting that the market will move and soon. If the market moves higher, you get longer the underlying. If it goes lower, you get shorter the underlying…What do traders do with those positions? They hedge them.
This keeps markets range-bound unless some greater force comes to knock us out of the range. No such luck so far this week.
