EUR/USD

The EURUSD is up testing the 38.% retracement of the move down from the August 6th high to the low on August 24th. That level comes in at the 1.2871 level. The high for the day reached 1.2872 minutes after the NFP report. A break above will target the 1.2900 level where the trendline off recent highs come in.

The action so far today is confusing to say the least. However,there are some patterns - some levels - which are starting to make sense in a senseless market. So if you are confused, take a moment and listen in to the commentary. Perhaps it will clear some of your confussion.

When the EURUSD trades above the 100 hour MA, it gives the pair a bullish bias. When the price trades above the 200 hour MA, it confirms the bullish bias. When the price fails to stay above the 200 hour MA and moves back below that moving average, longs should be exited as the market is saying, “I am not ready to trend higher”.

Expect a sugar rush like move as Bernanke comments are reported at 10 AM. Last year, the comments had around a 100 pip range as the market moved up and down and all around. This year I would expect something similar. The comments are anyone’s guess. Popular thought is if new or rather a strong hint of QE (which is doubtful as that is why there is a FOMC - they decide that), the dollar gets weaker. If he doesn’t hint, expect up and down volatility. The good news is that the market has some key levels that straddle the current price so there are some boundaries to lean against or use as guides for bullish or bearish bias. I would think that the smart money will be using and watching the key levels for their clues today. Click to see the key levels.