The EUR/USD pair drift a little bit lower at the open on Monday, but as you can see bounced higher and challenge the 1.3750 level. Now that we've done this, I think that this market still has continuing the bullish attitude to it, and as a result I am only buying the Euro at this point. With that in mind, any short-term pullback could be thought of as a potential buying opportunity as I still think this market needs to test the 1.38 handle in order to be satisfied.
If we can get above the 1.38 handle, I believe that this market will head to the 1.40 level before it's all said and done. Above the 1.40 level, and things get truly interesting, but that's not something I expect to see right away. After all, Europe has its own issues, and it's just happens to be that the market is ignoring them at the moment. If you look at the way that this pair has traded over the last couple of years, we have simply gone from focusing on one sides issues to the other side’s issues.
Jobs numbers in the USA.
If there's one thing that could change the attitude of this pair quickly, it will be whether or not the United States is continuing to add jobs. If the jobs numbers pickup, then I believe that this market will turn around completely and start falling drastically. After all, that is what the Federal Reserve is waiting on in order to make its decision on tapering. If we get a strong jobs number for the next several months, then tapering is all but assured and that will without a doubt drive up the value of the US dollar.
In the meantime though, it appears that traders are willing to overlook trouble in Europe, and focus on the fact that they do not feel that the Federal Reserve can taper quite yet. Because of that, we simply have only one choice and that's start buying the Euro on dips. I still think that the 1.36 level is significant, and as a result it should be the "floor" in this market going into this week.
