The EURUSD is showing some upside potential but so far lacks the momentum that the GBPUSD has demonstrated. The range for the day is 69 pips. The average over the last 22 trading days is 103 pips. So there is room to roam, if the momentum and technicals can remain positive.
What would keep the pair positive/bullish today?
EURUSD shows some bullish signs, but a move above the 1.2500-1.2508 is still needed.
First, the pair at the lows today, did find support buyers against a lower trend line (see red numbered circles). That is bullish.
The price has ventured above the 50% of the November trading ranges at the 1.24798 area. That is bullish.
The price is also now above the 100 and 200 hour MAs (green and blue line in the chart below at the 1.2468-72). That too is bullish.
Now, in the non trending month of November, the price did move above and below these two MA levels on a number of occasions. And although there were times when the MAs gave buy and sell clues, there were other times when the market seemed to ignore them. Not to make excuses, but that happens when the price is non trending and the market is unsure of the next move. In lieu of the MAs the Red and Blue boxes were more dominant as a technical tool in November (see boxes in the chart above).
However, the two moving averages are converging which tends to be a signal to look for a break away from the current area. So I will be watching for this area for clues from the buyers. If the buyers want to take control, they should protect this area. If that can be shown, a move toward the topside trend line at 1.2501 and the 61.8% at 1.25079 will be eyed as the next targets to get above (and stay above). The 1.25322 level comes in after that.
Let’s face it, the EURUSD is showing a reluctance to go higher and a reluctance to go lower. At some point that stalemate will be broken with a move outside the box(es). For now, we are left listening to the little clues from the hourly chart. It may be hit or miss. Some of you may have a more bearish fundamental bias. Some of you may have a more bullish bias. For me, I will try to keep an open mind, listen to the price action and see if a few pips can be made here and there. For today, the action is more bullish.
The US Manufacturing PMI is up at 10 AM. Needless to say, it will have an influence with expectations for 58.0 vs 59.0. Prices paid are expected to come in at 52.1 vs 53.5.
