The EUR/USD pair rose during the Friday session after the very poor jobs number out United States. The nonfarm payroll number came in at roughly half of what the consensus was, and as a result we saw a lot of weakness in the stock markets. Money ran away from the US dollar at first, and as a result you can see that this market did in fact push above the 1.30 handle.
On this chart, you can see that we have plotted the 50 day exponential moving average, which of course has acted as dynamic supporting resistance over the longer term. The 50 day EMA matches up with the 1.30 resistance level, and the fact that the market did pullback slightly during the last hours of the Friday session does suggest to us that perhaps a little bit of resistance is coming.
Even though the United States didn’t have as many jobs as expected, we have to keep in mind that the Euro suffers from being the currency of the European Union. After all, there is a severe lack of confidence in the banking system after the Cyprus debacle, and the Italians still can get together to form a governing body after the elections. With that being said, the Italians will more than likely have to head to the polls yet again, as they are locked in a stalemate as far as forming a coalition is concerned.
The markets absolutely hate uncertainty, and as a result this knee-jerk reaction may have been the thought that the Federal Reserve is going to continue the quantitative easing for longer than anticipated. That part may be true, but we have to think that it’s only a matter of time before we see some type of headline out of the European Union that has this market falling again. With that being the case, there are easier trades out there to be involved with, and we will simply wait for that resistive candle in order to start selling this market yet again. The market has been in a downtrend for some time now, and with good reason. Friday’s number did not change that.
Written by FX Empire