Forex Trading: EURO is the dog

The EURO has been the dog for the day.  The pair sold off overnight on weaker IFO out of Germany, was pressured further after the 8:30 AM US numbers, then bounced on the housing data. 

The bounce was strong enough and the housing data was weak enough to get traders buying dips on expectations of a weaker dollar again  When the pair moved back through the 1.5701 level (the 200 hour bar on the 4 hour moving average), the "buy on dip" traders, thought it  best to cover and sell. 

Meanwhile, there was also some selling in the EURGBP which helped the downside move.

Now on dips, traders are buying again, but so far, have not found a strong bid to recoup profits (or move back toward the 1.5700 level).  This has led to a herky jerky buy and sell pattern as dip buyers sell either new lows (on a tight stop) or on shallow rallies (on a tight take profit) 

The London/EUROPE crowd is going home soon and it should calm things down.  The 1.5701 level on the upside will be eyed as resistance.  The downside could test the 61.8% retracement of 1.5601 level. In between, the scalpers will be following their 5 minute charts for short term momentum trades.