- The EUR/USD has drifted a little bit higher during the training session on Wednesday, as we continue to dance around the parity level.
- We have the jobs number coming out of the United States on Friday, so I think the next 36 hours or so are going to be very quiet.
- Part of what we may be seen as a little bit of short covering is because there’s nothing out there to suggest that the Euros should be rallying for any significant amount of time.
The 1.00 level is obviously a level that a lot of people pay close attention to. And as a result, we have seen a lot of noise in this general vicinity over the last several days. I think that continues to be the case on Friday, and quite frankly you are probably going to have to go down to short-term charts in order to play a range more than anything else. If we break down below the recent low, that opens up the possibility of a break to the 0.98 level, but I don’t think that happens without the job report.
Euro Expected to Lose Ground
Alternatively, if we do break higher, I believe that the 50 Day EMA near the 1.02 level will be significant resistance, assuming that we can break above the 1.01 level. The market has been in a downtrend for quite some time, so there’s no reason to think that the sellers have disappeared. I think there is a certain amount of psychology at play due to the round figure, but q this is a market that remains a little lacking when it comes to directionality in the short-term, but longer-term it’s very clear.
If we break above the 50-Day EMA, that could change things, but it’s not really until we break above the 1.04 level that I would consider this market one that I could be a buyer. In other words, we would need to see a huge shift in attitude to make this thing a viable asset down. The greenback continues to be a major driver of where markets are going in general, so therefore I think what we have is a “fade the rally” type of situation regardless of what happens. This is especially true considering that even if the jobs number is less than desirable, the Federal Reserve has already said that they are going to continue to tighten.
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