The EUR/USD pair went back and forth during the session on Wednesday, and in the end essentially decided nothing. That may be because of the U.S. Senate coming to grips with the idea of extending the debt ceiling, and therefore reopening the US government. That being said, the one thing we can garner from this chart action is that the 1.3500 level did in fact offer support, and it appears that it is going to continue to do so.
Going forward, it makes sense of this market would essentially go sideways in the meantime, because we did see a relatively parabolic move higher late August, and as a result the market may be a little bit exhausted at this point. Also, we have a situation where the Federal Reserve has its hands tied, as the nonfarm payroll numbers have not come out. So that being said, traders can't necessarily get a handle on where the employment numbers will come out.
The "anti-dollar."
Remember that the Euro is the "anti-dollar”, and as a result this market will react to what the Federal Reserve can or cannot do, and although I don't believe that the Federal Reserve will be able to taper off of quantitative easing, I think that the markets will breathe a sigh of relief when the nonfarm payroll numbers come out softer than expected, and as a result we should see this market rise.
I think the 1.36 level offers resistance, but ultimately if we close above the 1.3650 level, there's probably not a whole lot to stop us from going to the 1.40 handle before it's all said and done. This market should continue to go higher over the next several months that is going to be choppy, as this pair has been for quite some time now. In fact, this pair has been choppy since the financial crisis several years ago. There are moments in time where the pair trends nicely, but in the end we have simply just gone back and forth over time. I think we are now going to enter a nice uptrend, fonts don't get too comfortable - things can change quickly.
