By: Christopher Lewis
EUR/USD had another back and forth session on Thursday in order to finish the day relatively unchanged. There was an attempt to push the pair lower, but the end of the day saw many of the sellers covering, more than likely to get out of the market before the Non-Farm Payroll report that is coming out later today.
The report will be one of the most anticipated ones this year. Simply put, traders are looking at it for clues to as where or not the Federal Reserve will go on another round of easing. If the jobs situation in the United States starts to deteriorate, this could be the catalyst for further easing. This would of course end up weakening the US dollar, and as the Euro is the most followed currency on the other side of the Dollar trade, we will more than likely see a move higher in this pair if the jobs number is bad.
However, the French elections over the weekend will be followed by the market as well. Granted, most people expect to see Mr. Hollande come out on top, the real question is what his attitude towards the various agreements signed over the last year to shore up the Euro zone in general. One of the things that he appears ready to do is raise the taxes in France to an absurd 75% on the highest earners, and this will certainly cause money to move. Because of this, the jobs number won’t be the only thing moving this pair around.
Triangle and hammer
The candle for the Thursday session looks very supportive, so perhaps the market is anticipating a pro-Euro session. However, the hammer is right in the middle of the larger consolidation area which looks much like a descending triangle. With this in mind, I believe that this market is one to be avoided today and probably Monday as well. There is a lot of information for Euro traders to digest at this point in time, and as a result – it could be very volatile over the next couple of sessions. In times like this, I prefer to look at the bigger picture.
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