The Euro fell significantly during the course of the trading session on Tuesday to reach towards the 1.20 handle, an area that of course will attract a certain amount of attention due to the fact that the large figure attracts money flow, and of course we also have the 50 day EMA sitting just below there so I think that is yet another reason to believe that the structure could attract a certain amount of attention. Furthermore, we have seen a significant amount of resistance in that general vicinity.
EUR/USD Video 05.05.21
Ultimately, I do believe that we go looking to test the highs again, but we could see a lot of noise in the short term to get there. On the other hand, if we were to break down below the 50 day EMA, then the market is likely to go looking towards the 200 day EMA underneath, which is sitting at roughly 1.1850 level. All things being equal, the market is going to continue being noisy, but I still believe that it favors the overall uptrend.
With all of that in mind I believe that it is only a matter of time before we see some type of catalyst, perhaps the jobs number on Friday will be that catalyst. I know that estimates are all over the place, so it has a high likelihood of causing a lot of noise in general. The US dollar is on its back foot, but if there is a sudden rush to safety, we could then see a breakthrough to the downside. So far though, it does not look like we are quite ready to do that.
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