The EUR/USD pair fell during most of the session on Wednesday, but as you can see found enough support at the 1.3650 level to bounce and form a bit of a hammer. However, I see significant resistance at the 1.37 level, and I also see that there is a high probability of resistance all the way to the 1.3750 handle as well. In other words, this is a market that has far too much in the way of resistance above to be comfortable going long. In fact, if I wish to play the Euro, it’s probably going to be in the EUR/GBP pair, and probably to the downside as we are starting to break down a bit. After all, we have a mess as far as what’s going on in the United States and Europe, and what the market perceives as the next move by the central banks.
Adding to the confusion is the fact that today is nonfarm payroll Friday. Yes, I know its Thursday, but the July 4 Independence holiday of course will have government agencies closed in the United States. That being the case, it’s very likely that the market will go back and forth, make quite a bit of noise, and then ultimately settle one doing nothing by the end of the day. Certainly, I would be very surprised if we broke out or down with any significance by the time the market closed. That’s the way this market has been for some time, and nonfarm payroll Fridays tend to be the absolute worst example of this type of days.
Sometimes, it’s just not worth the hassle.
I get plenty of emails from new traders asking me where the Euro is going to go. Quite frankly, I don’t care where it goes against the US dollar, it’s not worth being bothered with at this point as there is far too much in the way of confusion. If you wish to trade the Euro, try going long against the Japanese yen, or again, short against the British pound given the correct move. This market for me is simply dead money waiting to happen.