EUR/USD Signal Today 06/02: Rallies To 50 Day EMA (Chart)

(MENAFN- Daily Forex) Potential signal:

• I am a seller of this pair, right here, right now.
• I would have a stop loss at 1.0510 and would be aiming for a move back down to the 1.0250 level.
• However, with the economic noise coming out over the next couple of days, I would do this with half the usual size.

During the trading session on Wednesday, we saw the euro rally rather significantly, reaching the 50 Day EMA before pulling back a bit. The 50 Day EMA isn't necessarily magic, but it is something that people pay attention to, and I also recognize that there is a lot of resistance above that could come into the picture. I believe that there is a massive amount of resistance between here and the 1.06 level, meaning that there are almost 2 handles worth of problems for the euro.

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This is a market that continues to be very noisy, and I do think it is in the midst of a major consolidation area. However, you should also keep in mind that the Non-Farm Payroll announcement comes out on Friday, and I will be a major influence on what happens with the US dollar. The Services PMI number came out to points lower than expected on Wednesday, but it is still in expansion territory coming in with a reading of 52.8 for the month. In other words, despite the fact that it is a little lower than anticipated, it still shows signs of strength Analysis

The technical analysis is certainly negative for the euro, and I think that continues to be the case. The 1.05 level is an area that's a lot of resistance, but then again, we see the 50 Day EMA causing issues as well. Above the 1.05 level, the market is likely to see another wave of selling pressure all the way up to the 1.06 level. Ultimately, this is a market that I think will continue to favor the downside, as the European Union is struggling economically. On the other side of the Atlantic Ocean, you have the Federal Reserve which is nowhere near cutting rates and therefore it makes sense that traders will be paying attention to technical indicators just above.

In order to get bullish again, the technical analysis suggests that this market needs to clear the 1.06 level on a daily close at the very minimum. The only other thing I can think of that could come into the picture and have people buying this pair would be if the Federal Reserve suddenly decides to have an emergency rate cut.

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