EUR/USD fell for most of the session, as the European Central Bank cut rates early in the day. The ECB cutting of the rate from 1% to 0.75% was widely expected, but it does appear that the bank is becoming more and more dovish. While this doesn't surprise me, after all we've been bickering about the European problems for three years now; the market seems to have been surprised for some unknown reason.
It really doesn't matter, all that matters is that the market fell. We are currently looking at a close that is very bearish, and with the nonfarm payroll number coming out we could see continued movement. More than likely, the first part of the Friday session will be very quiet as the world awaits the announcement out of America, and as such I expect very little motion out of this pair before 8:30 AM Eastern standard time.
For me, this pair looks very weak, and I can only sell the Euro as it has been the epicenter of all bad things in the Forex market. The world continues to buy the US dollar out of the fear, and while that isn't a great reason to be popular, it is certainly working to the favor of the Americans at the moment.
I am willing to sell a break of the low from the Thursday session, but only after the nonfarm payroll number comes out. After all, there's no point in putting risk on the table before what is essentially going to be a 50-50 announcement. If we see some type of supportive action in the Euro, we could see a move back up to the 1.27 level as it would simply continue to consolidate. However, I think eventually this pair does fall, and there is nothing currently that suggests that I'm wrong.
With this being said, after 8:30 AM New York time, I am going to be placing a position if we break down. If not, I will be looking to sell rallies as this pair should continue to struggle with various headline risk from time to time.