Yesterday, we saw a sizable move in USD pairs which came right after the release of the US services PMI and ISM non-manufacturing PMI. These two releases were quite positive, yet that´s the time the next phase of this USD selloff started.
Perhaps forex traders were just waiting for the US economic data to be out of the way in order to continue their USD short covering.
Since the selloff ran out of fuel yesterday, the market has been trading in a tight range, with most major forex pairs moving about 30 pips up and down. I guess the forex market is now expecting the next round of the US data.
The 20 moving average (20 SMA) in grey on the EUR/USD chart has been providing support all morning while yesterday´s high keeps slapping this forex pair down every time we get up there. It might be a good opportunity to sell this pair up here around the 1.0605-10 region for a short term forex signal, but we´re only two hours until the release.
It´s still a good place to look for a few scalping forex trades until the time comes. As I said in our last market update yesterday, I´m really looking to open a long term sell forex signal in EUR/USD shortly before or after the release.
1.0660-70 would be a great place for such a forex trade since a number of technical indicators such as moving averages, stochastic indicator, and resistance levels all align in pointing down. If the numbers are bad (but not too bad), then we might see the upside stretch even further, which would be an even better selling opportunity. Well, let´s wait and see.