The Euro has been a little bit positive in the early part of the trading session here on Thursday, but we continue to see a little bit of hesitation between the 1.18 level and the 1.1850 level.
There are a lot of things going on, not the least of which will be the war of course in the Middle East, but the market has seen quite a bit of volatility based on positive news flow coming out of the Middle East and then eventually negative.
It's also worth noting that the non-farm payroll announcement comes out on Friday, so you have to be a little cautious with this, recognizing that we have a situation where there will be a lot of volatility during the session on Thursday going into Friday and as a result, caution is the better part of valor.
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I do think that there is going to be a very immense amount of pressure above that could cause quite a few headaches for traders who are trying to get long. 1.1850 being broken to the upside would obviously be a very bullish turn of events; it could show the EUR/USD market as ready to break higher, perhaps the 1.20 level and beyond.
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That being said, what you need is a reason for the Federal Reserve to look like they are not going to stay tighter for longer. In this environment, there is a lot of positivity out there based on some comments coming out of Tehran and Washington DC, but the jobs market, if it's still really hot, that could kill some of that US dollar weakness as it will make the Federal Reserve have to sit on its hands even longer.
If we do fall from here, I expect the 50-day EMA near the 1.1685 level to offer support. I think we're just stuck in this compression pattern at the moment.
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