The EUR/USD pair rallied during the session on Wednesday, but as you can see ran into far too much resistance to stay above the 1.36 level. The 1.36 level is the area that I need to see overcome on a daily close in order to buy with confidence in this marketplace, and as a result I am still flat of this pair. The shooting star that formed for the session on Wednesday suggests to me that the market is going to pull back and remain in the consolidation area that we've seen over the last several sessions.
I still believe that the 1.35 level will more than likely offer a bit of support, but there is also the possibility that we have a larger consolidation area, forming between the 1.36 level on the top, and the 1.33 level on the bottom. If that's the case then expect lots of choppiness going forward, and as a result the market should continue to be difficult to trade for anything more than a short-term move in one direction or another.
Thanksgiving.
Thanksgiving is today in the United States, and that of course will decrease liquidity during American trading hours. If that's the case, expect the day to be decidedly lopsided in favor of the Europeans session, and once the Europeans go home, you can expect almost no emotion at all.
The fact that we had a hammer a couple of days ago suggests to me that the 1.35 level will be difficult to break through, and as a result I think we are going to tighten up over the next couple of sessions. Quite frankly, is probably difficult to make any type of serious decision in this market over the next couple of days, and next week of course is the nonfarm payroll week.
This market of course will cause the markets move in general, and the jobs number will directly affect whether or not the US dollar will increase or decrease in value. With that being the case, expect a tightening of this pair, but I would of course be willing to buy this pair on a break of the top of the shooting star, as the fundamentals won't even matter at that point in time - it will be a technical move to the upside.
