The EUR/USD currency pair is thus far without a notable direction, trading near the 1.1740 area. It’s charting that course against an absolutely brutal economic backdrop. Meanwhile, sellers are defending their turf close to a horizontal 100 Simple Moving Average (SMA). On the other hand, buyers are fiercely defending the downside at the aimless 200 SMA. Sadly, the performance has not improved, largely because of continued confusion over what the United States government shutdown. In turn, the markets have responded with extreme apathy.
So far Thursday, the EUR/USD pair has pulled back after recently breaking above and turning positive on the Momentum indicator. This drop is a sign of dwindling bullish sentiment which would imply that traders might be reconsidering their long positions. Similarly, the Relative Strength Index (RSI) for the pair is at its lowest point. It now hovers just above 51, which means that there’s almost no speculative interest in the currency pair.
The economic backdrop is clouded by national-level layoffs recently disclosed by locally based employers. ORLANDO, FL — In the month of September, private sector companies announced 54,064 planned job cuts. This is a notable drop of 37% from the 85,979 cuts in August. This drop could be a sign of upcoming relief in labor market tightness. The broader effects on currency trading are not yet clear.
With an eye on the EUR/USD pair, here are some key support and resistance levels traders are watching. Support is seen at 1.1710, 1.1685 and 1.1650 and resistance at 1.1780, 1.1830 and 1.1880. The daily chart shows that the pair has been trapped in a tight intraday range for three consecutive days. At the time of writing, the altcoin was attempting to overcome the flat 20 SMA. It reclaims its stance above a still-bullish 100 SMA located near the 1.1600 mark.
The current U.S. federal government shutdown has profound and disastrous effects. It would seem that the markets, for all their ranting and raving, are reacting with caution, not panic. This more cautious approach indicates that participants are considering several variables before committing to the bold moves in the currency pair.