The EUR/USD pair fell after initially trying to rally during the session on Thursday. The market found the 1.38 level be far too resistive, and then simply fell back down to the 1.37 level. That being the case, it appears that the market certainly is weak enough that we could break down at this point. However, we have the nonfarm payroll numbers coming out later today, and that of course means that we could very easily see massive volatility and a significant move in one direction or the other.
The 1.37 level to me is significant in the sense that I believe it is essentially “holding the market up.” If we can get below there, I believe that the market should head to the 1.35 level, and possibly even lower if the markets get spooked or some type of euro negative type of headline comes out.
Nonfarm payroll will offer trading opportunities given enough time.
The nonfarm payroll numbers coming out will more than likely offer some type of trading opportunity as the market will certainly react in a knee-jerk type of fashion, as it always does. That being the case, I feel that any significant move that doesn’t last the entire day is a potential buying opportunity if it is to the downside of course. After all, if we pop below the 1.37 level, and that pop back over it, the very good chance that that would become a very significant support region.
All things being equal though, I believe that this market is at the lower end of what will be consolidation. I suspect that we will go as high as 1.3850 without too many issues, although it certainly will be very volatile between here and there. The real question then is what will eventually make this market move in one direction or the other for the longer-term? I wish I knew the answer that, right now appears that we are simply in a bit of a quagmire, a stalemate if you will between the two world leaders as far as currencies are concerned.
