The EUR/USD pair fell during the session on Thursday as we continue to grind away in the previous consolidation region. I believe that the 1.08 level is supportive, and as a result I do not look for this market to break down below it. I have the 50 day exponential moving average on the chart and it is flattening right at that level now. On top of that, the 1.08 level has offered support previously, so by virtue of market memory, I believe that it’s only a matter of time before the support starts to strengthen.
Having said that, there is a significant amount of resistance at the 1.1050 level above, so at this point in time I feel that the market is essentially stuck in the consolidation area and will more than likely stay there for the foreseeable future.
Liquidity Issues
Granted, we have had some liquidity issues over the last several sessions due to the holidays, but at this point in time I feel that the market just simply isn’t ready to make its decision yet. The Nonfarm Payroll numbers come out later this week, so it’s likely that this market will grind away between now and then. Because of this, any time we get close to the 1.08 level, I’m willing to buy on the slightest hint of support. The same thing can be said as far selling is concerned you’re the 1.1050 level, and with that I feel that plane the range is about the only thing that can be done in the meantime.
If we did break out ahead of the jobs number, I would be surprised. However, that would show just how the market is trying to position itself for the new year. Because of this, a daily close outside of this range would have me following in whichever direction we had the move. In the meantime, I will keep it to range bound and small trades.
