The EUR/USD pair continues to bounce around in a range, and Wednesday was just a simple bounce move from the bottom of it.
The Euro initially fell during the trading session on Wednesday to test the 50-day EMA near the 1.17 level.
The 1.17 level of course is an area that's been important a couple of times for the EUR/USD pair in the past and I think markets continue to look at the 50-day EMA as the short-term floor in the market. The 1.18 level the beginning of significant resistance all the way to the 1.1850 level. I think we are essentially stuck in this range, and I think that continues to be the main scenario here.
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Friday's Jobs Report and Market Volatility
The reality is that Friday is the jobs number in the United States, so I think that keeps this market somewhat tight anyway and let's be honest the Euro is typically very choppy and doesn't like to make big moves in a short amount of time regardless.
So, with that being said it's not a huge surprise to see that we are finding ourselves in this sideways market and I think that continues to be the case as we are at the bottom of the overall range. I do favor buying at the moment, but I think that's a short-term setup and obviously I would want to be out of the market before we get the non-farm payroll announcement on Friday as it will throw a ton of volatility into the situation.
If we were to break down below the 1.1680 level, then it opens up a move down to the 200-day EMA followed by the 1.15 level. Ultimately this is a market that is trying to sort out whether or not the Federal Reserve is going to keep its interest rates extraordinarily high and of course whether or not the European Union is going to be able to get any type of energy coming out of the Middle East.
That is a conflict that I think is nowhere near ending although we aren't necessarily in the hottest part of the war but with all of the random tweets or random statements expect choppy volatility coming out of the bond market influencing these currencies.
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