The EUR/USD pair had a very strong session on Thursday, breaking the top of two hammers from earlier this week. That being the case, looks as if we are heading towards the 1.10 level, an area that has been resistive in the past. As you can see, I have a yellow rectangle in this general vicinity as I believe that there is a significant amount of resistance waiting for the buyers. Any resistive candle in this general vicinity has me selling this pair, as I do not believe in the longer-term viability of the Euro at this moment.
The European Central Bank continues to keep a loose monetary policy, so I believe that ultimately this pair falls. However, today is nonfarm payroll, so it is possible that the volatility sends this market higher in the short-term. Nonetheless, I think that’s just going to be a way to take advantage of value in the US dollar, as the Euro certainly has no business going higher for any real length of time at this moment.
Selling rallies continues to be the way forward
I believe that selling rallies will be the way to go forward as far as this market is concerned, simply because the Euro has so many issues surrounding it, and as a result I believe that if we get some type of bounce due to the employment numbers out of the United States, this will be a value play as far as I can see.
If we did break out to the upside, I really don’t feel comfortable buying the Euro until we get above the 1.15 level though, so really this point in time it’s easy to simply sit back and wait for selling opportunities. The market is simple to deal with, if you are patient enough to wait for those signals to appear. The nonfarm numbers today should be the determining factor for the next week or two, and with this, I am selling – it just comes down to when……
