Forex Trading: EUR/USD Moves Higher As The Market Searches For Direction

EUR/USD moves back above the 100 hour moving average as the better Challenger report has the market worried about the implications of a stronger US economy.

The payback of the increased deficit may start to weigh on interest rates and lead to less demand for US bonds.  So although it should be good for the economy, it may be bad for the dollar as demand for bonds at current rates slows, raising interest rates.  Plus the exit strategy out of quantitative measures may be slow in the process.

Yesterday, the EUR/USD had a double top at the 1.3437 level.   The price moved below the 100 hour moving average in the Tokyo session, moving toward a test of the 200 hour MA below.  The low came in at the 1.3246 during three separate hourly periods.  The 200 hour MA came in at 1.3432.

Now the price is back above the 100 hour and waiting on the ADP report.  A stronger number may lead to further gains to the upside. Watch for intraday support at the 1.3297.

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