The EUR/USD pair initially fell during the session on Wednesday, but found enough support at the 1.3525 level in order to bounce and form a hammer. This hammer is interesting, simply because it simply traces the recent consolidation area, and as a result I think this market is waiting for some type of news to move it. I personally believe that it is the nonfarm payroll number, and because of that I think the market might be a little bit tight for the next day or two, but once we get that announcement. We could start to see the true move.
For me, I believe the 1.35 level will be an area that the sellers cannot get the market through. In fact, I'mconsidering that to be the "floor" in the market at the moment, and as a result it's difficult to short theEuro in this area. This is especially true with the nonfarm payroll number been so volatile, and the focusof the markets for the next two days. Being flat of this market is probably the only "safe" position thatyou could have at the moment.
1.36 is the gateway to 1.38
The 1.36 level above is a resistance area that I find particularly interesting as it opens up the door to amove higher, and aiming for the 1.38 handle. If we can get above 1.38. At that point time it makes sensethat we would go to 1.40 before the move was done. I don't think that move would be easy though, anda certain amount of choppiness would be expected. However, that could be the long-term trajectory ofthis market if the Federal Reserve cannot taper anytime soon, which is what I personally believe at thispoint.
It doesn't matter though, the nonfarm payroll number will be what determines where this market goesin the short term. If the jobs number comes out much stronger than anticipated on Friday, you canexpect this market to make a serious challenge to the 1.35 level for support. However, for the next twodays. I wouldn't be expecting much. Until that announcement comes out.