Up and down with eyes on stocks(?)
The stock market is up today, but given the declines this week, it is not up by much. Also, the indices are much lower than implied in pre-market trading right after the employment report was released. This has the dollar more on the defensive. In addition, perhaps China devaluation is still on the minds of traders as well as the weekend approaches? Perhaps it is just Friday squaring? Perhaps it is wages or lack of them? Perhaps it is the technicals?
The "stories" as to why will be sorted out in "tomorrows paper". The technicals will show how that story unfolds and may (often?) contributes to that story. So what about the recent technicals? What is the price action and "levels" telling me?
Looking at the price action today. the fall took the price to the support at the 1.0802-11 area. This was the start of a key support area outlined in my post before the NFP was released. Held.
The rally took the price higher and above the 1.0854 level. That level was the low for the day before the employment report. The high corrective price has moved to 1.0889 - just below the London high at 1.0899. The last correction lower stalled at 1.0854 - the old low for the day.
So if involved in trading technically, sellers need the price to go below the 1.0850-54 area. The buyers need a move above 1.0900. In between is a bar room brawl.
Is it a stock trade? Is lower stocks bullish for the EURUSD while higher stocks bearish? Is it something else like weekend flows or the buzz word for the week...China and what they might do (over the weekend or next week)? There are stories but the technical levels I think, are getting worked out for whatever scenario the market and noise has in mind for the day.
