Today, the Euro (EURUSD) is trading unchanged vs. the Dollar, as traders shift their focus to this afternoon’s ISM Non-Manufacturing report
Technically, the Euro should struggle in the next 24 hours as the EURUSD pair spent Thursday, Friday, and Monday night trying to take out the October 21 high at 1.1180. However, as trading resumed for the new week on Monday morning, Forex traders lost their patience and sold the EURUSD pair. The October 21 high and last week’s high now look like the start of a double top high, and traders that bought last week might see a retest of the high as a chance to unload their EURUSD long positions.
Tactically, I think traders will attempt two strategies, and the first one is to buy a break to the October 21 high and target the August 7 high at 1.1242. A break to the October 21 high will signal a resumption of the bullish trend.
The second option is to wait for a decline to the 1.1070-1.1104 interval and try to buy the pair there as it provides a better risk-reward ratio. However, if the price were to slide below the October 29 low at 1.1070 then it will suggest that the EURUSD trend has turned lower, and the price might reach the October 15 low.
The next market moving event is the US ISM Non-Manufacturing report. The markets anticipate that the outcome will be 53.5 from 52.6 prior. Most of the major events since mid-last week have been dollar postive. First, the Fed decided to pause its rate hikes, then the NFP proved to be much better than projected, so it will be interesting if the ISM Non-Manufacturing report will do the trick and turn the fate of the Dollar.