The Euro bounce a bit during the trading session on Wednesday as we continue to hang about the 1.13 level. We are in the midst of a larger consolidation area that extends from the 1.1375 level, and the 1.1225 level underneath. Ultimately, this is a market that has been chopping around back and forth and I think that will continue to be the case going forward. The Friday session of course features the nonfarm payroll announcement, so you have to keep that in the back of your head but really at this point in time I think all we see here is a bunch of choppy behavior.
EUR/USD Video 06.01.22
The 50 day EMA is currently sitting at the top of the consolidation area, so at this point in time it should offer even more resistance. That being said, the market is more than likely going to be a lot of back and forth until we get through that major employment figure. Keep in mind that we are still seeing larger traders come back into the market after the holidays, and once we get there Friday it is likely that next week will kick off “real trading.”
With that in mind, it is crucial to keep your trading position relatively light, simply because we could chop around quite a bit. However, you should also keep in mind that if you are a short-term range bound trader, this pair may work out quite nicely for you as we have such well-defined barriers at the moment, something that range bound trading is absolutely built for. Even in that scenario, I keep my position size small though.
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