By: DailyForex.com
The EUR/USD pair fell hard during the session on Thursday, as we broke well below the 1.32 handle. I have been suggesting that the 1.32 level is significant support recently, but it must be pointed out that the breakdown is and as massive as I would like, simply because we have the nonfarm payroll number coming out later today. With that being the case, we obviously don't want to take a serious chances at this point, and the quickest way to do that would be going ahead and trying to place a trade right away in this market.
This particular pair will be especially sensitive to the nonfarm payroll number as the markets will try to figure out what the Federal Reserve is going to do as far as tapering off of quantitative easing. Obviously, that will have a massive effect on the value the US dollar going forward, and that of course will have a massive effect on this pair as the Euro is considered to be the "anti-dollar", and because of that it will become imperative to understand what the market is expecting in order to understand what this pair is going to do. If the jobs numbers are strong, this leaves the market to believe that the Federal Reserve will in fact taper, and this would be very strong for the Dollar overall. If that's the case, you can expect this pair to continue much lower. Needless to say, if the number is very weak, the markets will more than likely expect the Federal Reserve to extend the quantitative easing that it has been involved in for some time now, and this of course will push his pair much higher.
Do not forget next week
The Federal Reserve will eventually decide on what it wants to do as far as tapering is concerned, and that will certainly be the final "nail in the coffin" as far as what happens with the Dollar. Because of this, I think that this pair and the USD/JPY pair will both be very interesting places to be ones all of this information comes out. In the meantime, I believe that resistance will be found that the 1.34 handle, and a breakdown will lead us down to the 1.28 handle.
