During the Tuesday session, the EUR/USD pair fell significantly during the day, testing an uptrend line that has been very supportive for some time. This uptrend line is the bottom of the ascending triangle on the longer-term charts that I’ve been following for some time, and as a result I think it is pretty important. The fact that we fell during the session on Tuesday only shows that the market continues to try to drop down to that area in order to find buyers.
Having said all that, the Friday session did see a bit of buying pressure towards the end of the day. The 1.09 level below is the massive support as far as I can see, but having said that I think that we aren’t necessarily going to go much higher in a short period of time. That’s not to say that we can’t rally, it’s just that I don’t expect some type of explosive move in the near term, as we have the Nonfarm Payroll Numbers coming out on Friday.
Could be a slow couple of days
This is a pair that has no real clear direction, and with the jobs numbers in America coming out in just a couple of sessions, it would not surprise me at all to see this market do very little in the meantime. With that being the case, I feel that the market will probably respect that support, simply because there won’t be anything major to move the markets more than likely. This of course could be changed by some type of shock headline, but in the meantime it just simply appears that we are trying to figure out whether or not we want to break down.
I think that the central banks of both being very dovish will continue to plague the market as far as making some type of serious decision, but do recognize that a move below the uptrend line is fairly negative and should send this market looking for at least 1.08, but quite frankly I wouldn’t be surprise at all to see the 1.05 level. On the other hand, a bounce from here could look all the way up to the 1.11 level, or even 1.13 over the next several sessions. Again though, I don’t expect much until Friday.
