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Forex pairs in this Article » EUR/USD
By: DailyForex.com

The EUR/USD pair fell during the session on Thursday, slamming into the 1.3650 area. This area is the top part of support as far as I can tell, extending down to the 1.36 handle. That level should be much more supportive, and the fact that we bounce from below doesn’t necessarily surprise me. This is an illiquid market at the moment, and to think that the market was going to break through a significant barrier like that was probably asking a bit much on the session. However, I believe that there is still a trading possibility in this market, but it’s all going to be short-term based.



I would expect short-term possibilities to the upside from here to present themselves, probably on 15 minute or even hourly charts. Beyond that, you’re going to have to simply wait until after the nonfarm payroll numbers at the end of next week. After all, that is exactly what the markets have been focusing on lately, so to think that that’s going to change over the next couple of weeks is probably a bit naïve.

Consolidation, sideways, choppiness, and then eventually a move.

I personally don’t care what Credit Suisse said today. For those of you who are unaware, the bank had suddenly reverses position on the Euro and became bearish. Granted, that could have moved the market down a little bit but the exacerbation of the move to the downside would have been because of the lack of liquidity. Quite frankly, they been wrong more than once in the past and banks tend to be laid on these moves. Remember, the banks trade in large size, so changing their positions around is quite a bit like moving a large ship in the ocean, it takes time. I can guarantee you that they got out of there Euro long positions before making that announcement.

In the end, I believe that the 1.36 level will continue to offer support, but at the heart of the matter is the employment situation in the United States. That will give us an idea as to what the Federal Reserve can do about tapering off of quantitative easing, which ultimately is the only question to ask at the moment. I believe a short-term bullish move could be had, but short-term is the key phrase there.

EURUSD Daily 1314

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