The EUR/USD pair fell during the course of the session on Thursday, and broke down below the 1.18 level. However, we did get enough support to turn things back around and form a little bit of a hammer, so I am not necessarily looking to sell this right away. In fact, with the nonfarm payroll number coming out today, I believe we will make a longer-term decision over the next 24 hours or so. After all, the Euro has been sold off drastically, so we have to be careful down at these already drastically low levels.
The shape of the hammer of course tells me that there are buyers below, and I do recognize that the 1.18 level was massively important on the longer-term charts, as the 1.18 level has been massively supportive during the monthly time periods. The market has shown significant support therefore five years now, so that makes this area very significant.
Nonfarm payroll could decide the next several handles
Today’s announcements will be vital, and it’s very likely that they could determine the next several handles. After all, the 1.18 level is massively important, so if it gets broken down below, we could just start falling. The market would more than likely head towards the 1.10 level over the longer term. If that does happen, and we break down below the bottom of the hammer from the Thursday session, I would be a seller of all rallies for the time being.
On the other hand, if we break above the top of the hammer for the Thursday session, I think we could bounce all the way to the 1.20 level in the short-term. After all, there is a gap up there that hasn’t been filled yet, and if we can break above that level, we could go as high as 1.2350 over the course of the next couple of weeks.
When I look at the longer-term charts, I cannot help but think we are about to make a big decision in this marketplace, so therefore I am paying quite a bit of attention to it.
