The euro went back and forth on Wednesday as we continue to see volatility. The markets actually moved for once, but by the time it was all said and done it is not a huge surprise considering that the market stayed within the larger consolidation area. That being said, the market looks as if it had a lot of people trying to close out positions heading into the end of the year, and it makes a lot of sense that we are to simply making a lot of noise at the moment.
The markets will be illiquid and continue to be so between now and probably the jobs report next week, so I would not put a whole lot of money to work. The 1.1375 level is significant resistance, so if we were able to break above there and then clear the 50 day EMA, then it is possible that the euro could really start to gain a bit. On the other hand, I see a significant amount of support near the 1.1225 level, which has held up for some time now. I believe that we will stay in this range for the next week or two, but once we get the jobs number things may change.
I believe that the euro is one of the choppiest pairs out there, and this time year it really outdoes itself. Because of this, it is not worth putting a bunch of money to work, but once we get through that jobs report then we can start to look at the longer-term picture. Keep in mind that we are still technically in a downtrend, so I still favor shorting, but I need a setup to make it happen. Right now I simply do not have it, so I will be observing more than anything else over the next five or 10 days. Once we do get signs of exhaustion after a move higher, I might be willing to finally put some money to work. I do believe that is more likely than not going to be this setup sometime around late next week, but until then I am still simply in a bit of observation than anything else. In general, just be patient and the setups should present themselves.
