The EURUSD is moving to NY highs and looks toward the London high at the 1.3164 level. The bearishness from Euro issues in early NY trade, have been replaced by worries about the US issues. Initial Claims, Philly Fed and Existing Home sales came out weaker than expectations and this has reinvigorated those who are looking for QE3 (i.e. lower dollar US policy). The rise in Spanish 10 year yield from the 5.74% auction results to 5.89% is on the back burner.
A look at the up and down action now shows support at the 1.3120 level. Like the move off the lows, this is the 38.2% of the move higher. It also is a low after the prior high and near the 100 and 200 bar MA on the 5 minute chart below (blue and green lines).
Also like at the lows today, traders can look toward resistance levels to sell with stops on a break above. The next key resistance comes in at the 1.3164 which is the high for the day (Why not?) . A move above that level will next look toward the high for the week at 1.31715. The combination makes that area a logical place for sellers looking to sell high. Stops would likely kick in above the 1.3172 level.
Eventually, the pair will break out of the Jekyll & Hyde mood swings that have taken the pair from bearish to bullish, bullish to bearish. We simply have to deal with it and look for the momentum break that lasts.
