Market uncertainty is the main theme here today. After seeing the euro break below recent lows of 1.3435 vs. the USD, it immediately reversed higher to trade at 1.3600 a few hours later. A very uncommon market led to very common trading as dollar buyers didn’t show up today. This is possibly setting up for a reversal as we’ve been calling it since last week. Now that the test of 1.3450 is over, we expect the market to either consolidate a bit further before a further retracement to 1.3800/1.4000 level. With that being said, if the market breaks through 1.3430 once more, we then expect a full revival of dollar strength and the move to continue to the lower 1.30s. With the very important NFP release this Friday, traders will be tasked with figuring out the direction of the market. Not a lot of correlation in the market so tread carefully.
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