The EUR/USD pair went back and forth during the course of the session on Thursday, as we continue to hover right around the uptrend line from the longer-term ascending triangle. With this, it’s probably going to be after the Nonfarm Payroll numbers come out that we will see the true decision of this particular market. This candle looks very neutral, and as a result it appears that once we do break out in one direction or the other, the market can finally got to where it is destined to go over the next couple of sessions.
The uptrend line of course is very important, and it basically determines the longer-term move in this particular market, as it features a couple of central banks that are looking for ways to kill off their own currency’s value. On top of that, we have recently had statements from Janet Yellen that the United States may have to wait to raise interest rates longer than anticipated, and possibly even go to negative interest-rate. This is shortly after the European Central Bank suggested that more stimulus could be on the way. In other words, we are still very much in stocks in the currency war that has made currency trading so volatile recently.
If we break above the top of the range for the session on Thursday, we will more than likely reach towards the 1.11 handle. It won’t necessarily be easy, there’s quite a bit of noise above, but quite frankly it’s probably going to happen given enough time. Above the 1.11 level, this market then reaches towards the 1.13 handle. Having said that, if we break down below the bottom of the range for Thursday, at that point in time this market is probably free to break down below the 1.08 handle which should send the Euro down to the 1.05 level given enough time. It is because of this that we feel this particular jobs number is vital to the currency market and its movements currently. Between now and then, we would be very leery of putting positions on.
