The EUR/USD pair initially fell during the session on Friday, but once the dust settled from the nonfarm payroll report, traders started to selloff the US dollar in reaction as although the announcement was stronger than anticipated, it wasn't enough to get people to think that the Federal Reserve is going to taper anytime soon. With that being the case, the United States dollar will continue to weaken against the Euro for the interim.
Looking at a hammer for the Friday session, does suggest that we are going to go higher. The 1.36 level below the hammer offers enough support for me to start buying. Any pullback at this point time as long as we stay above the 1.36 level should continue to be buying opportunities. I believe that this market is going to go to the 1.38 level first, and then eventually to the 1.40 level.
The Federal Reserve cannot taper until spring of next year.
For my money, I believe that the Federal Reserve will taper eventually, but it's probably going to be in spring of 2014. Because of this, you can expect the US dollar to continue to weaken against the Euro, but there is a certain amount of head warns working against the European Union as well, and it is because of this that I think that the market will start turn back around in the next several months, sending this pair back down. In other words, we are going to continue to chop around, as we have for the last several years. However, I do think that there is a couple hundred pips to the upside to be had, and therefore I am looking to start buying here for the short-term, but would have to reevaluate things on the longer-term charts as we start to open up trading for the year 2014.
As far as selling is concerned, if we can get below the 1.35 handle then I would be willing to do so. Until that happens on a daily close, I'm not interested, unless of course we get some type of resistive candle at one of the aforementioned targets.
