The EUR/USD pair try to rally during the session on Monday, but as you can see the 1.38 level has offered resistance yet again. Because of that, it does not look likely for this market to be overly bullish in the near-term. Remember, the FMOC is getting together this week, and therefore it could affect price of the US dollar going forward. However, I think the biggest problem this market is going to face is the fact that we’re getting towards the end of the year. With that being the case, it’s difficult to imagine the markets taking off drastically in one direction or the other.
Even if we do get some type of significant move, it will be based on an ill liquid market, which of course is a recipe for getting whipped around drastically. I can remember a few years ago we had a massive move in this particular pair, which initially I had made a lot of money but made the mistake of holding onto the trade for a couple of days. The next thing I knew, I had lost quite a significant amount of money based upon the massive pullback that happened in the middle of the night. Because of this, I learned that the moves during this time of year cannot be trusted.
Federal Reserve and jobs numbers still dictate where this market will go.
The Federal Reserve in the jobs numbers will dictate where this pair goes ultimately. I believe that the markets are still worried about the jobs numbers in the United States, and as a result we will more than likely continue to move around drastically based upon things such as the ADP numbers, Initial Unemployment Claims numbers, and then of course the Nonfarm Payroll numbers. I would say though, at this moment in time it appears that the market thinks the Federal Reserve is quite some months away from being able to taper off quantitative easing. However, do not forget that the European Union is starting to worry about deflation, which will be an absolute killer for the Euro sooner or later. With this being said, I believe that a pullback here offers a buying opportunity as the 1.36 level should be the “floor” in this market. Alternately, if we can break the top of the shooting star, we go to the 1.40 handle. However, no trades in this market should be held onto for any significant amount of time.
