The EURUSD pair rally during the day on Thursday, slamming into the 1.0950 level. That is the top of the recent consolidation area though, and with the job number coming out during the day as well, I believe that it makes sense that the market will probably struggle to make any real headway now.

I think that the 1.09 level below should be supportive, and then the 1.08 level L level after that. If we can break above this area, that would be a very strong signal that we are going to the 1.10 level, and with the Nonfarm Payroll Number coming out, I think it would signify that the market is expecting a strong number, as ironically, this pair continues to go higher due to the “risk on” nature of that type of announcement. If we can break above the 1.10 level, the market will more than likely go looking for the 1.12 level.

In the meantime, …

In the meantime, I believe that this pair will probably pull back, looking for the 1.0900 level as Asian traders will undoubtedly be on the sidelines, probably not causing too much in the way of noise as far as the market is concerned. They tend to stay on the sidelines ahead of this number as it causes quite a bit of volatility, and of course trading this number ahead of the announcement is essentially just gambling. Markets tend to use these announcements to drive ahead for the next week or so, and this should be the case today.

If we can break down below the 1.0830 level during the session, I think we fall enough to fill the gap in go looking for the 1.0750 level. This would more than likely be a result of a massive “risk off” type of move around the world.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro (EURUSD), minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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