EUR/USD has traded 1.2575-1.2615 from the post-US payroll reaction last Friday until now. EUR/USD opened in NY within 5 pips from where it closed Friday, and traders are loathe to start anything today given lack of participants in the US and Canada, as is usually the case on a US holiday where the equity markets remain open - but most of the banks are closed, the skeleton crew traders are sipping their coffee, filing paperwork, or whiling away the hours until they can close up shop.
In this environment pricing will be defensive, and any clients with serious wood to chop will wait until other markets open and can digest it. The only volumes that go through will be "must do" trades - and predatory clients will be dissuaded from executing due to the unattractive spreads being offered. On another note, traders are somewhat ambivalent at current pricing as to which way EUR/USD turns - and seem content for external flows to show them the way. The US payroll figures have created a shift in sentiment, from bearish to neutral and traders are just looking for a trend - any trend - in preference to what has been up to now a sideways chop.
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