The US dollar rallied significantly during the trading session on Thursday, looking to reach towards the 113 handle. However, as we start to get towards the end of the session on Thursday, things will calm down as we await the important jobs number. The jobs number of course is highly influential in this pair, as the interest rate differential between the 2 economies is highly influenced by employment. A break above the 113 handle would be a very strong sign, and at that point I think we would go looking towards the 114.50 level above. If that’s the case, I would anticipate that we will run into a lot of noise, extending to the 115 handle. A break above the 115 handle is what I think is in the cards longer-term, because that allows us to be more of a “buy-and-hold” type of traitor. In the meantime, we are starting to see more bullish pressure to the upside every time we pull back, which is typical of this pair when we get a bit of a trend change.
If we were to break down below the 112 level, the market should then go down to the 111-level underneath, which is even more supportive. The jobs number has a massive influence on this pair, so I believe that if we get a short-term pullback after the number comes out, it should be a lovely buying opportunity as there should be more than enough support underneath. It would take a horrific jobs number to send this market lower for the longer term, so I think given enough time value will be taken advantage of.
Written by FX Empire