- The Euro initially tried to rally a bit against the US dollar during the early hours on Thursday, but we continue to hang around the 1.07 level.
- The 1.07 level was previously support and it should now be thought of as potential resistance, but I think it's more or less acting as a magnet for price.
- This does make a lot of sense considering that we have the non-farm employment numbers coming out of the United States on Friday, so we are just simply killing time.
Furthermore, this is a market that I think features two central banks that don't know what they're doing, as denoted by Jerome Powell's speech on Wednesday. With that being the case, there's no reason for this pair to make big moves. I'm using it basically as a proxy for the US dollar index these days in order to place trades in pairs that will actually move.
Some Technical Areas
If we can break above the 50 day EMA in the EUR/USD, then it opens up a potential move to the 1.08 level. On the other hand, if we break down below the 1.0650 level, then the 1.06 level gets targeted. Anything below that could open up the trap door and see this market really drop. That being said, I would anticipate a lot of noise, and therefore you also have to keep in mind that this is a market that I think is going to be choppy more than anything else. It is possible that we get a big move, but right now I just don't see the catalyst.
With all that being said, do not be surprised at all to see this pair somewhat unchanged by the end of the day on Friday, as it is typical behavior for this market when we get an employment announcement. Most of the volatility that you see is a simple lack of liquidity, not people trading the market of any size whatsoever.
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