• We have bounced nicely since then as interest rates in America have fallen a bit. That, of course, gives a little bit of relief from US dollar strength.

• The market is currently hanging around the 200-day EMA and the 50-day EMA indicators.

As we are between them, I think this is a scenario that if we can break above the 1.17 level, it could open up a move to the 1.18 level. If we break down below the low of the trading session on Thursday, that opens up a trapdoor, if you will. I think we will go much lower. Generally speaking, I would expect that with something in the bond markets happening, yields rising in America.

Market Noise and Consolidation

The EUR/USD market continues to see a lot of volatile moves and, of course, it will come down to the latest rumor or tweet or headline coming out of the Middle East. I think you have a situation where traders continue to see a lot of noise, a lot of choppiness, and continue to focus mainly, I believe, on short-term charts.

We are in the middle of a larger consolidation area between the 1.1850 level on the top and the 1.14 level on the bottom. Being in the middle, I think opens up the reality that we’re basically at fair value. This ‘mean reversion’ could be something we see occur time and time again.

So, unless we see something change consistently on a bigger time frame and bigger outlook, I think we’re just stuck here. We’ll see. The 50-day EMA looks like it could offer a little bit of resistance.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire