Liquidity, uncertainty keep the market nervous
The EURUSD had a run to the upside after the weaker than expected ADP report. The move was able to extend what was once again a narrow trading range for the pair (from around 47 pips to 81 pips currently). That move was short lived as sellers retraced about 50% of the move higher (see 5 minute chart below).
The pair is now chopping around with the pair testing the 50% of the days range for the 2nd time. Holding that level might be enough to get the traders (and it is shorter term traders who are more in charge of the market). To keep the push more to the upside.
Bullish reasons from the intraday 5 minute chart:
- We are above the close from yesterday at 1.0879.
- We are above the 100 and 200 bar MA on the 5 minute
- Held the 50% of the move higher off the weaker ADP
What is not so bullish comes from the hourly chart which has topside resistance targets in the way. The spike higher off the ADP report ran into topside trend line resistance near the 1.0921 - 1.09256 area. The high got above that area but it was quickly reversed.
The pair is also having some difficulty getting back above the 1.0892 low from July 30. So the picture from the hourly perspective is not so rosy.
I think that between the market price action, the fundamental cross winds with NFP to come on Friday, the wishy washy technicals and liquidity concerns, the move from here is a toss up. Patient sellers can look toward the upper targets - with the 100 hour MA at 1.0943 being an upside target that might be something to aspire towards.
On the downside, a move below the 50% could cause traders to give up on the upside for a retest of the 100 and 200 bar MA on the 5 minute chart (blue and green lines), then the double bottom.