The EUR/USD pair shot straight up during the session on Tuesday after the nonfarm payroll numbers came out much lighter than anticipated. Because of this, traders anticipate that the Federal Reserve will not be able to taper off of quantitative easing anytime soon, and this of course is dollar negative. As a result, the US dollar got beat up against most currencies, but as the Euro is considered to be the "anti-dollar", it makes sense of this market was one of the better performers for the session.
We blasted through the 1.37 level, which shows just how strong this move was. In fact, I think that we are heading to the 1.40 level relatively soon, and probably even quicker than most people anticipate. This is more or less the "last nail in the coffin" as far as any ideas of tapering are concerned in the near-term, and as a result this gives the market carte blanche to start selling the dollar again.
Employment numbers will continue to be the most important numbers out there.
Going forward, I believe that the nonfarm payroll numbers will be the single most important economic indicator to pay attention to as far as this currency pair is concerned. That being the case, you could almost throw out most other things, barring some type of meltdown in Europe itself, which seems unlikely at the moment. Because of this, I believe that this market will be one that you can buy on the dips going forward, and short-term traders will probably do quite well to when exactly that.
Longer-term traders look to simply hang onto this market until we get to the 1.40 area, possibly even higher than that. I believe that this market should continue higher without too many issues, simply because we have shown the 1.35 level be such support, as well as the 1.3680 level now. With that being the case, it's almost impossible to imagine a scenario where you would short this market, and quite frankly only the truly foolish would do so as this would be tantamount to stepping in front of a train.
