EURUSD continues higher for one more day after the pair tested YTD low last Wednesday and managed to rebound amid speculation over Fed rate cut after comments from the FED chair Powell on Tuesday, raised expectations the U.S. central bank is moving to an interest rate cut. Yesterday the pair rejected at 1.1275 but today has positioned for another attempt. Currently the pair is trading at 1.1270 just shy of the 100 day moving average at 1.1275 in choppy trading. A convincing break above the critical MA would provide a bullish signal and entering long position for a fast trade is not a bad idea. I will be more patient though and I will wait until afternoon for the US jobs data due later to start a position. I am very cautious on euro as the recent rally it looks more like a technical rebound supported by broad USD weakness. Declining euro futures open interest position is another point that supports my cautious view.
European Central Bank holds its next policy meeting on Thursday and we expected to keep interest rates unchanged though there is growing speculation it could shift to a more dovish stance as Eurozone macro figures continue to disappoint.