- The EUR/USD has pulled back ever so slightly during the trading session on Thursday as we are getting close to the non-Farm Payroll announcement on Friday.
- This obviously will cause a lot of noise in the market, but it’s not as if Thursday didn’t have its own drama. After all, we had the ECB meeting, where they raised interest rates by 50 basis points.
- That being said, it’s probably worth noting that the market continues to see a lot of noisy behavior, but ultimately the Euro sold off after the announcement.
I think at this point we still see plenty of buying pressures underneath, but at this point in time, I think we have a bit of a noisy environment to get overly exposed. The job number of course will only make that worse, so I would not be interested in throwing a bunch of money into the market as the volatility in New York will be off the edge.
Waiting for Another Catalyst
If we were to break down below the 1.08 level, then I think the Euro more likely than not will drop down from there, perhaps reaching the 1.06 level. Anything below the 1.06 level codes in this market is much lower, so therefore I would be a bit cautious about trying to pick a bottom down there, as the market has shown us just how out of control and volatile can be. That being said, when you look at the start, does not take much to imagine the idea that we are in an up-trending channel, and of course, the 50-Day EMA is essentially where the bottom line of that channel would be.
If we were to turn around and take out the 1.10 level, then I believe that the Euro goes looking to the 1.12 level given enough time. The Federal Reserve has come and gone, and so has the ECB. Once we get past the job summary, we may have a bit more in the way of clarity. The market participants continue to see a lot of disruption from time to time, but you can see when you zoom out that this has been a steady and 45° angle type of rally, one that may be able to continue but we need to find another catalyst to get long again.
Ready to trade our daily Forex analysis? We’ve made a list of the best Forex brokers worth trading with.