With the lightened holiday trading the currency markets are consolidating thus far and appear to be avoiding violent intraday price swings on the thin volume. This condition may not hold true as traders come back online in the overnight session.
Looking at the euro against the dollar, we see price hovering near the January 2011 low of $1.2870 and has appeared to have found a base just above the low.
This may provide the euro with enough strength to hold above the low going into the end of the year due to light trading from now to December 30, the last trading day of 2011.
However, in 2012, traders and investment funds looking to make up for a down year will most likely resume the pressure on the euro and send it lower.
The next key support level can be found back in June 2010 at $1.1876 once the January 2011 key support level is broken.
Looking at the Russian ruble, traders find price action in no man's land as we find an upward Fibonacci wave -- from 27.916 to 32.514 with a C retracement of the 618% at 29.672 -- making higher lows and higher highs since the October 618% level.
Draw a trend line across the bottom of the candle wicks starting from the Fibonacci C retracement to today's price action. You will find that price broke through on Friday, and that today's price movement remains below the line.
Technicians looking for confirmation should note moments when the full body of the candle closes below the trend.
Traders may also notice a very powerful candlestick formation forming on the chart known as the head and shoulder pattern.
You can already see the right shoulder and head and must wait for the right shoulder -- and then, for price action to break the neckline.
Patience is the key word here as trader wait to see which direction the ruble ultimately takes.