The Euro has rallied significantly during the course of the trading session on Thursday to show signs of life again. The 200 day EMA above could offer a bit of resistance, but the 1.19 level will be much more important. This will be highly influenced by the jobs report, which of course will move the US dollar, and as a result move the Euro.
Breaking above the 1.19 level could open up the possibility of a move towards 1.20 level, an area that has been important more than once. The 1.20 level has a lot of interest in this area, so therefore I think is likely that we would continue to see a lot of selling pressure. If we were to break above there, then it would obviously be extraordinarily bullish for the Euro. The fact that we closed that the very top of the range for the trading session on Thursday does suggest that perhaps we could get a bit of follow-through, but it will be interesting to see if the jobs number in America is very big, maybe it is likely that the US dollar would strengthen it in hopes that the Federal Reserve might raise interest rates.
If the market does break down significantly from here it is likely that we would see the US dollar strengthening in general. At this point in time, it is very likely that the market will pay close attention to the next couple of days, as at the level that we are approaching is so important. We have had a significant bounce from here, and it certainly looks as if we are going to try to continue going higher due to the rapid turnaround over the last couple of weeks. Remember, Jerome Powell has suggested that even though the United States would be tapering bond purchases, the reality is that interest rates are not going anywhere anytime soon, therefore I would be cautious about trying to pick up the greenback until we get a bit of a larger signal to the downside. The 1.18 level should be significant support, and therefore if we were to break down below there that could send this market into overdrive as we break down. In general, this is a market that will continue to see a lot of questions asked of it over the next couple of weeks.
