By: DailyForex.com
The EUR/USD pair broke higher during the session on Thursday, as the US dollar got absolutely waxed everywhere. The 1.32 level getting broken to the upside of course is very significant, but the biggest concern that I have is that the nonfarm payroll number comes out later today. Because of this, it's hard to "trust" any type of move ahead of time, and because of this I think that there is serious potential for some type of reversal.
Of course, we could just simply continue going higher. Nonetheless, this is a bullish sign so far, so be interesting to see how the day closes out. I for one hardly ever trade on a nonfarm payroll Friday simply because of the random nature of the move. This particular nonfarm payroll Friday has a particularly interesting back story to it as it should be interpreted as a sign of what the Federal Reserve is going to do going forward.
Looking at the 1.32 Level
The 1.32 level was the top of a significant consolidation area going all the way back to the middle of February. Because of this, the breaking of it does matter, and is in fact something to pay attention to. Again though, if it weren't for the fact that nonfarm payroll was coming out later today, I would be already long of this market. However, I believe that the questions being answered later today are going to mean much more than a former resistance level well.
This is one of those times where fundamentals will most certainly trumps technical analysis. Normally, I pay much more attention to the technical but with the idea that the Federal Reserve may or may not be tapering its quantitative easing, that of course is a massive concern for the market. Going forward, I think that this particular nonfarm payrolls number will be one of the handful of pivotal moments for the year of 2013. A break of the high from Thursday session is a buy signal in my opinion, but I will not take it until after the announcement. On the other hand, we could very easily close below the 1.32 handle. If we do so, I believe that this market will fall quite significantly.