The EUR/USD pair tried to rally during the session on Thursday, but as you can see gave back about half of the gains for the session. This is an acute surprise though, because you have to realize that with nonfarm payroll numbers coming out today, a lot of traders will want to be bothered putting a whole lot of money into the market. This of course is the primary market that people will give their opinion on the US dollar in general, and the fact that the nonfarm payroll number is one of the major economic indicators about and pointing in the United States certainly will make it front and center this particular month.
You have to remember that the Federal Reserve has stated that they are concerned about tapering off of quantitative easing while the employment situation in America seemed so dour. That is why it’s so important to pay attention to this particular announcement at this moment in time. After all, if the employment situation is still poor in the United States, the Federal Reserve will not be tapering off of quantitative easing anytime soon, and that of course is a very dollar negative move waiting to happen.
The shape of the candle for the session on Thursday is a bit of a shooting star, but quite frankly we don’t put too much thought into it. We believe that it simply a matter of some traders taking profit, and as a result we feel that it’s a little bit of a “false signal.” However, we do recognize that a break of the top of it would be significant during the session on Friday, and we believe that would be the beginning of a move that should see this market eventually go to 1.40 before it’s all said and done. However, if we do pullback we think that the 1.35 level will be very supportive, so we might be interested in buying a supportive candle down there. In the meantime, we believe that the Asian and European sessions will be very calm and quiet.
Written by FX Empire