The EUR/USD pair fell during the early part of the session on Thursday, but as you can see by the charts bounced enough in order to form a bit of a hammer. However, there is just as many reasons to be negative of this pair as there are positive, and as a result it very difficult to take a longer-term stance at this moment.
Looking at the chart, you can see that the 200 day exponential moving averages just above current price action, at roughly 1.3065 or so. This of course will have longer-term traders bearish, whilst the hammer like candle for the Thursday session will have people bullish, especially considering that it is based around the 1.30 handle.
One of the biggest problems that you will have trading this pair today is the fact that the Italians are trying to come together and form some type of coalition for their Parliament. There are several different outcomes possible, and of course they run the gamut of both positive and negative for the Euro. With that being the case, it's very risky to be involved in this pair ahead of time.
The only election in Rome that was going to happen quickly, happened in Vatican City
Unlike the papal election, the Italian Parliament has almost no chance of forming some type of coalition. With that being said, there might be a little bit of a negative reaction to this reality once the results come in. However, that should be somewhat muted as most people aren't foolish enough to think that the likelihood is very high that these politicians come together. However, if they did come together with some type of moderate coalition, this would probably send Euro through the roof. After all, when it comes to trading and the markets, it's more often which you don't expect that moves markets than what you do.
All things being equal though, I believe that we will have elections again in about a month and that the markets will continue to be volatile and choppy until then. However, my next move trading the Euro isn't going to be made until after the Friday close.
