The fact that we closed the session towards the very bottom of the candlestick, suggests we have more negativity coming.
- The EUR/USD currency pair initially tried to rally during the trading session on Friday, but then got absolutely slammed as the jobs number in the United States came out much stronger than anticipated, with a reading of 518,000 jobs added last month, instead of the expected 188,000.
- Because of this, it’s likely that the market is going to see more of a move back to the US dollar, as we may have finally gotten a bit too far ahead of ourselves.
- It is probably worth noting that the market has been turned around right at 50% Fibonacci level, an area where a lot of people do tend to pay quite a bit of attention.
The 1.08 level is a large, round, psychologically significant figure and an area where we have seen a lot of noise in the past. If the market breaks down below there, then it’s likely that we could go look into the 50-Day EMA underneath, which is a bit lower. It’s just above the 1.06 level, which is a large, round, psychologically significant figure as well, in an area that we have seen a lot of pressure previously. That being said, I think it is probably only a matter of time before we try to get down there, and if and when we do, I anticipate that there should be plenty of buyers in that general vicinity as well.
In fact, the 200-Day EMA currently sits right around the 1.05 level, which is an area that a lot of people will be paying close attention to. That of course is a large, round, psychologically significant figure in it would attract a lot of headlines as well. Anything below there will send the Euro much lower, perhaps racing towards the parity level again. Alternatively, if we do turn around and take out the highs of the last several sessions, we would be above the 1.10 level, and then could go looking to the 1.12 handle.
A lot of this is going to come down to the idea of whether or not we have rates rising in the United States or people start to worry about the overall growth picture around the world. Ultimately, I think there is much more negativity out there than positivity, and the fact that we closed the session towards the very bottom of the candlestick, suggests we have more negativity coming.
Ready to trade our daily Forex analysis? We’ve made a list of brokers that accept US clients to trade Forex with.