The EUR USD pair fell initially during the session on Tuesday, but did find enough support just below the 1.35 level in order to bounce and form a relatively nice-looking candle. This candle of course shows signs of support, and the fact that it happened at the 1.35 level of course is important as well as it has not only been supportive, but it’s a large round psychologically significant number. With that, we normally see buyers stepping into the market, and taking advantage of the overall uptrend
While I don’t believe that any major moves are coming in the next couple of days, I do think that the markets essentially waiting to see what happens with the nonfarm payroll numbers. The fact that the 200 day exponential moving average is just below doesn’t exactly hurt the bullish case either, and with that, I believe that there are enough long-term buyers stepping into the market now that more than likely this pair will bounce. However, there’s probably going to be some trepidation by traders with that announcement been so close.
Federal Reserve and jobs
The Federal Reserve will be paying attention to the jobs numbers, as will the rest the marketplace. If the jobs number is relatively strong, and there is the possibility that the Federal Reserve will continue to taper off of quantitative easing, thereby driving up the value the US dollar overall. That would send the market lower, breaking below the 200 day EMA, which of course also has a chain reaction effect of having longer-term sellers step into the market.
Regardless what happens, I believe that the next several sessions will be relatively quiet but by the end of the week we will have a lot of major answers two major questions. If we bounce from here, I would suspect that the move to 1.37 is relatively easy, as it is the next overall target. If we can get above that, I believe that the market goes to the 1.38 handle, and possibly even higher. However, above 1.38, expect a lot of resistance. Talk to money
