The EUR/USD pair went back and forth during the course of the day Friday in reaction to the Nonfarm Payroll Numbers. With that being the case, the market looks like it is respecting the 1.11 level for support, but there is a significant amount of resistance above at the 1.13 handle. With that, the market looks as if the volatility will continue, and as a result I am staying on the sidelines in a marketplace that looks like it wants to take my money. Quite frankly, one of the biggest mistakes that newer traders make is that they do not recognize when trouble is waiting for them. With this, if you break above the top of the range for Friday, you could have a buying opportunity, but think the 1.13 level will continue to be very resistive.
Short-term trading only
Looking at the markets, I believe that the only way you can trade this market is to place short-term trades. With this, the market is one that I’m not willing to risk money in right now, but if you are looking for some type of longer-term trade, it’s mostly impossible to imagine feeling comfortable hanging onto the market for any real length of time.
The European Central Bank suggested just the other day that the possibility of further quantitative easing is possible, and with that it makes sense that the Euro fell. However, the Federal Reserve now is a bit of a question as far as interest rates are concerned. After the jobs report, the market is a bit confused due to the fact that although several members have suggested that they are going to have to raise rates soon, the reality is that the employment situation isn’t as strong as people would expect the Federal Reserve to need in order to move forward in interest-rate hikes. Expect a lot of volatility, as we now wait to see what the Federal Reserve will do in the month of September. Quite frankly, I’m on the sidelines.
