The EUR/USD pair initially fell during the session on Monday, but as you can see there was enough buying interest below the 1.35 level in order to continue to show support at this area as we have seen over and over again. That being the case, I think that this is a fairly strong buy signal, and a break above the top of the hammer, is in fact the trigger that I am looking for in order to start buying. I'm fairly confident that this is going to be a move that has the market going as high as 1.37 in the short term, and possibly even the 1.38 level.
This is basically an "anti-dollar" play, as although the European Union has come out a recession recently, the truth of the matter is that the European Union is in doing so strong that it would drive up demand for the Euro itself, but I think this is more or less selling of the US dollar because of its weakness.
Federal Reserve and jobs numbers
The Federal Reserve will continue to be watched very closely, as will the nonfarm payroll numbers this Friday. This is because the Federal Reserve is keeping a close eye on the employment situation in America, which they are using as a measuring stick on whether or not they can taper off of quantitative easing. This will have a great influence on the value of the US dollar, and because of this a weak jobs number will in fact push his pair higher.
I personally believe that is going to happen, and that the market is trying to get ahead of the announcement, as it does quite often. I believe that many people out there do not believe that the United States is adding enough jobs to make a major difference, because of that the Federal Reserve will continue to buy bonds and push the value of the dollar down. With that being said, I do think that this market will eventually head to the 1.40 level, probably over the course of the next two months.
