Unlike most analysts, I’m going to give you a piece of advice in this article that can save you a lot of aggravation: This market may not do as much as you think during the session today. Yes, I’m aware the fact that there is a European Central Bank meeting, and yes I am aware of the fact that the entire world is watching the statement coming out of Brussels. Yes, I’m willing to admit that the market could move today, but do not forget that tomorrow sees the nonfarm payroll numbers coming out, and that obviously is a major factor as well.
While the entire world focuses on what the European Central Bank will do and its effect on the Euro, let’s not forget that the Federal Reserve is going to be looking at these employment numbers with great interest as they have just now started to taper off of quantitative easing. If the jobs numbers simply don’t bring in a decent amount of new employees, it’s very likely that the US dollar could get hit as it seems that the central bank might be hesitant to further expand a tapering that we’ve seen recently.
Because of that, you can get a situation where the Euro gets a little bit of a boost during the session today, and then simply turns right back around or possibly vice versa, depending on how these 2 results play out. I think it’s very likely that a lot of people were going to lose a lot of money today in this market. It’s because of this that if I play the Euro, it will certainly not be against the US dollar.
There are alternatives to trading this pair.
One of the biggest frustrations talking the new traders is that they seem to get hung up on this particular pair. Yes, I understand that is the most liquid pair in the world, but quite frankly I have rarely if ever talked to someone who could actually move the market. With that being the case, liquidity shouldn’t be that big of an issue 99.9% of the time for you. Also, let us not forget that just because there is a 2 pips or less spread, doesn’t necessarily mean that you’re going to be making a lot of money. After all, you should be able to make money and a market that has a 3 pips spread just as easily. It’s not that big of a difference.
I will actually be trading the EUR/CAD pair today, especially if we see Euro weakness. The biggest reason for that is that it’s a backdoor way to play the US dollar, as it represents North American strength, and also gets the employment situation out of the way. In times like this, it’s probably best to avoid where everybody else is going to be.
