The EUR/USD pair went higher on the session for Wednesday, breaking above the top of the shooting star for the Tuesday session. This market looks as if it wants to go higher overall, but with Friday being nonfarm payroll Friday, I believe the next 24 hours should be very quiet. I have a hard time believing that the market participants will want to risk a lot of their account guessing on what the nonfarm announcement will say. That is gambling at best, and throwing money away at worst.
This market is essentially hanging on the words of the Federal Reserve, which in fact is hanging on the nonfarm payroll numbers. Several members of the Federal Reserve have stated that the employment situation is their main concern about tapering off of quantitative easing, and as a result the jobs numbers will be the main driver of this pair. Also, the European Union has exited recession, so this means that there is a high probability of this pair moving based upon the numbers.
Quiet before the storm.
The next day will be the “quiet before the storm” in my opinion. Because of this, I am not trading it in the meantime, and because of this I am flat in general. This jobs number will be crucial, and because of that I think several pairs will be highly volatile, this pair of course being the one everyone focuses on. This market will have resistance at the 1.36 level, and a lot of players will be stepping in and out of the market at that level. It is because of this that I think the best play is probably to simply wait until the announcement is made, and more importantly – the Friday close is printed to make any real decisions. Remember, the nonfarm numbers are just the tip of the iceberg, as there are a lot of other factors in that report that can have major implications. This is why a lot of the time the real move isn’t made until well after the announcement has been made – people are trying to read the details.
