The EUR/USD pair initially fell during the session on Thursday, but found support in the same general vicinity that we had seen the three previous sessions. The fact that the market bounced so much higher and close well above the 1.36 handle. Tells me that this market is "leaning" in the direction of the buyers now. Nonfarm payroll Friday is today though, and that of course can change things rather rapidly. In fact, I believe that the next 200 pips will be decided right now based upon this economic announcement.
If the jobs number in the United States a stronger than anticipated, you could expect to see a flood of money into the US dollar as bonds get bid up in anticipation of the Federal Reserve tapering off of the bond buyback program. Only way, we could see the Euro continue to strengthen, which I believe is actually what's going to happen ultimately. Having said that though, I do recognize the fact that we could have a knee-jerk reaction to the downside.
Longer-term uptrend?
At this point I have to question whether or not we are about to start a longer-term uptrend, because quite frankly I felt that the 1.36 level was a massive one in its implications. If we have a weaker than expected number out of the nonfarm payroll number today, I think this could send this market much higher, with 1.38 being the next target. If we can get above there, 1.40 almost be assured, and we could see the Euro really start to take off again as it appears that this is a binary situation. We will simply go into Europe, or go into the United States, and there really is no in between from all accounts.
Looking at this chart, I can see that we get below the 1.35 handle on a daily close though, it could open the door down to the 1.33 handle rather quickly. I don't necessarily expect this, but if we get an extraordinarily strong jobs number it could possibly happen. Nonetheless, I think unless we get a massive jobs number, it simply won't happen.
