Global concerns more a focus vs. the ADP? Chop. Chop.
The ADP report came out much stronger than expected (268K vs 197K est). Yet the EURUSD tumbled, stalled at the lows from yesterday at 1.0710 and then rallied. The US pre-stock market indications remain tilted lower although off the lows a bit. US trade deficit has come in better (that is less negative) than expectations at 42.4B vs. 44.0B estimate. This should be good for 4Q GDP growth estimates. Stanley Fischer is speaking. He skated around, gave a caveat that things change but 4 hikes seems about right.
Technically, the EURUSD is chopping up and down in trading today. There has been a move higher in the Asia Pacific session that retraced 50% of the move lower and backed off (see chart above). In the London/European session, the 38.2% has been a limit so far at the 1.07589 level (see chart above). As mentioned, the lows from yesterday held the low off the ADP.
Looking at the daily chart, the 1.0725 is the 61.8% of the move up from the December low to the December high. The price has peeked below that level a few times in trading today, but overall, there has not been a lot of time spent below that level both today and yesterday. On the topside, the 1.0788 area remains a key level that was broken yesterday. The level has swing lows from Dec. Also the 50% of the move up in Dec. is at that level. If yesterday was a real break, traders should keep a lid on it near there. If it fails, traders could get more neutral again.
Let's face it, today the trading in the EURUSD is trying to find a direction. Traders on dips like it. Traders near resistance targets above are liking it as well. The trendiness from yesterday. Be aware. The choppiness may continue for the time being as the market figures out the implications of all the stuff in 2016 (Stocks, Fed, geopolitics, China, ECB and inflation problems, employment to come on Friday).
