The EURUSD has moved higher on the back of….well dollar weakness? Yesterday, I titled the analysis “Should go lower, but?” and it has proven to be a foreshadow of the trading environment.
Overall, it is hard to attach a reason to the EURUSD’s move but from a technical perspective the price is up testing the next resistance area at the 38.2% of the move down from the Sept 16 high to the low reached on October 3rd. That level comes in at the 1.26885 . Connecting the weeks highs comes in near the area.
The EURUSD is testing the 38.2% and topside trend line before FOMC.
The price climb off the 1.2500 level (see weekend video by CLICKING HERE) has been herky-jerky – especially over the last few days. Such activity requires patience if looking for trading levels. It also suggests to “fall in like” with the market – try not to “fall in love” with it. Sellers are getting frustrated by the inability to sell off. Buyers are waiting for a move like Monday, but they are not getting it either. Be patient. Pick your spots.
I am more neutral/patient trader today given the choppy action I have seen so far (illiquid markets before FOMC minutes), with an fundamental bearish bias and a technical eye toward selling interest at 1.2746-57. These were the lows from 2013. I would expect sellers to like this level (see chart below). Can traders sell against the 38.2% and trend line level currently tested? Yes. Risk can be defined above 1.2700, but be aware that today’s action up to the FOMC may be less cooperative.
If unsure or not comfortable, you can trade with a lower amount. Trend more lightly as a hedge against the choppiness.
The EURUSD lows from 2013 came in at 1.2746-57. The price should find sellers against this level.
