The EURUSD has been up and down in Monday trading.  The jobless rate rose to 11.1% from 11% in April. This was the highest since the data started to be calculated in 1995. On a positive front, the PMI Manufacturing rose to 45.1 from 44.8 and estimate of 44.8 (Germany’s PMI rose to 45 from 44.7).  Also positive are that yields are also down on Italian and Spanish debt with the 10 year Italian bonds falling to 5.742 from 5.819 and Spanish bond yields falling further to 6.271% from 6.329% on Friday.    Despite the good new, the price was hurt by comments from Finland saying they would block ESM bond buying in the secondary market.  A wild card later this week will occur when the ECB will have their interest rate meeting with the expectations of a 0.25% decline to 0.75% (Thursday). This could hurt or help the currency depending on how the market perceives the action and comments from the central bank and its leader.

From a technical perspective at the current time, the range for the EURUSD is 82 pips with a 20 day average of 127.  So an extension of that narrow range is certainly a possibility.  NY is moving to new lows and is testing the bottom of a bull flag ( see chart below).  A break of this level will muddy the waters for the bulls (i.e. correction buyers)  with the next key target down at the 1.25826 (38.2% of the move up from Thursday).  Other key support comes in against the 50% of the move up and 200 hour MA (green line in the chart above) that comes in at the 1.25488 and 1.2552 levels respectively.

If support holds, traders should look for the action around the 1.2615-23 area for close intraday clues. This is near the earlier lows for the day and near the 50% of the last leg down in the pair. The 1.2623 level was the January 13th low . Stay below and the bears may have more control. Move above, and the bull flag might become the dominant play.

The move down from the highs from last week give those caught by the strong action an opportunity to make some money back.  The reality of the situation from the Friday actions are starting to be looked at with some skepticism. To keep the downside moving, the break of the bull flag and move toward and through the 38.2% will be needed.