EUR/USD Daily Outlook- May 2, 2014

Christopher Lewis

The EUR/USD pair broke out to the upside slightly during the session on Thursday, but as you can see the 1.39 level offered enough resistance to push the market back down, forming a shooting star. The shooting star of course is a sign of weakness, and as a result it appears the Euro may be ready to pull back. This pullback isn’t necessarily a sign of a major move, but rather in my opinion a sign that we may continue to consolidate between the 1.38 and the 1.39 level.

With that, a break of the top of the shooting star of course is a very positive sign, and would essentially breakout above a longer-term downtrend line from the monthly charts. That downtrend line actually formed at the beginning of the financial crisis, and because of that I believe that the breaking to the upside would be a very positive sign.

Nonfarm payroll Friday.

The nonfarm payroll Friday always moves the markets drastically. With that being the case, it’s not surprising that the market struggle to go much higher during the session on Thursday, as a lot of people are unwilling to keep positions on in the marketplace before that announcement. Going forward, it obviously can move the market, but I don’t see anything in this chart that tells me I need to be involved in this pair right now.

Because of this, the best thing that I believe can be done as far as is market is concerned is to simply sit on the sidelines as it could be very volatile today, but at the end of the day I think the close should give us good hands as to where we are going. Right now, I am going to simply wait to see what the daily candle close is like, with it being above the top of the shooting star, I’m a buyer, but if we break down below the 1.38 level, I am more than willing to start selling. With that, I’m in neutral but I do believe that today could be a very interesting candle.

EURUSD Daily 5214

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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