Uncertainty is the name of the game on the forex market lately as moves are completely retraced on no news at all and bulls and bears are not making money. The classical example comes from the EURUSD pair as it traded sideways for more than a week now.
Last Friday the pair moved to the downside only to be bought before the main fixing of the week and the day. The selling was caused by Deutsche Bank troubles in Europe, but, funny enough, the buying was attributed to the same bank. What mattered was that market reversed the move and closed the week and the month well above the 1.12.
And then Monday came. All day Monday the EURUSD pair moved with a bearish tone, only for Tuesday the downside move to catch some speed and completely take the lows made the previous Friday.
However, it was just a matter of time until bulls stepped in as rumors that the ECB is thinking about tapering its Quantitative Easing program lifted the Euro all over the dashboard. And just like that, 1.12 level came again.
Being a Non-Farm Payrolls week, it is important to look at the bigger picture in order to position for the event. Moving forward, I would say that the EURUSD is poised for a move above 1.1250 before the NFP on Friday and then it all depends on the data.
The AUDUSD pair didn’t react when the RBA held the rates unchanged and the press conference and rate statement didn’t bring anything new. It still trades with a bullish tone on the short term, even though the medium to long term seems to be rather bearish.
The USDJPY pair is trading like in any NFP week, namely with a bullish tone. From the moment the previous month ended, the pair was only tripping upside stops. It is obvious that there’s a triangle on the daily chart and this one can break in both directions. I would insist though that the 100 level is key in this pair and the fact that now it is trading around the 103 level doesn’t mean bears are done with the pair.
All in all, it seems that markets are looking for a break but there’s no reason for it at least just yet. US elections are coming closer by the say and it very well be that the US dollar is going to hold its ranges until elections are done.