The EUR/USD pair fell significantly during the session on Thursday, crashing towards the 1.11 level. That is an area that should be supportive, and as a result we did in fact bounce from there. That suggests to me that we are going to continue to see buyers and sellers both in this marketplace, even though the European Central Bank suggested that perhaps they will extend more stimulus to cause inflation in the European Union. That of course is negative for the Euro, but at the end of the day we still have the jobs number coming out today, and that of course can move this market in the exact opposite direction in the blink of an eye.
With this, I feel that the EUR/USD is probably one of the more dangerous pairs to trade today. However, I would have to think that there is more than likely going to be support below that causes any type of fall in this pair to be temporary and a potential buying opportunity.
Buying supportive candles on short-term charts
I’m simply going to buy supportive candles on short-term charts as I believe we do go higher. However, I’m not anticipating this market breaking above the 1.1350 level during the day, and as a result I am going to be very quick to take profits. I will probably play a position size half of what I normally would, just simply to be somewhat cautious in the face of what could be significant pressure in this marketplace.
On the other hand, if we break down below the 1.10 level, I think this pair will then fall apart and head towards the 1.08 handle given enough time. I don’t necessarily think that’s going to happen, but we will have to wait to see what the jobs number brings the market. It is not uncommon at all for the market to basically end up where it started after this announcement, so do not get married to any position at this point.
