Market skittishness continues

The EURUSD initially rose after the weaker than expected US data, but has retreated back to where it came in skittish trading. The pair has been moving gradually higher in trading this week with a higher highs and higher lows. However, in between there has been choppy, up and down moves, which has traders skittish.

The movement seen after the data is case in point. The EURUSD broke above the days double top at 1.0746 and moved to new session highs at 1.0767, only to have the price retracement back to where it began before the reports. Such is not the action needed to build trader confidence in moves (up or down - the move lower today quickly reversed too).

In any case, the decline has a price back down testing the 200 hour moving average at the 1.07204 level currently (risk for longs). There should be buyers in this level if the upside is to continue. On the topside, it is not hard to see, but the double top at the 1.0746 will need to be broken (again) to give the buyers some sign, that the buyers are more in control. If it can happen, there should be further momentum with the topside trend line from the wide channel (at 1.0773) and the 50% at the 1.07777 as upside targets.