Extends narrow range on Yellen comments
The EURUSD was in a narrow 50 pip trading range before Yellen comments/PPI. The range has extended to 64 pips now but this is well short of the 22 day average range of 130 pips. It suggests there is room for more extension. PPI was a higher than expected. Yellen reiterated her expectations to raise rates in 2015 on the expectation the economy would pick up in the 2nd half of the year. Of course the liftoff is one thing. The pace is more important. The story remains the same.
Technically, the low from yesterday at 1.09644 is the next target. The low from last week at 1.0915 is another target. The market continues to trade above and below the 100 day MA. That is indicative of a non trending market that is not ready to move. The 100 day MA is currently at 1.10146. The break lower is looking to leave that in the dust. We have made breaks below the 100 day MA last week and also this week - only to have a bounce back. In the short term therefore, look for 1.0980 to 1.0990 on corrections to keep a lid on the pair if the downside is to "the way". That represents the 38.2-50% of the move down on the Yellen headlines. If the price can find sellers in this area, it shows the bears want to remain in control. A move above and it muddies the trendy move a bit for me.
Overall, the market is not one to love if it does not do what it should. I want to test the commitment by making the challenge at the close retracement levels.
PS Greek parliament vote too. Patience.
