The EUR/USD pair fell from the 1.37 level during the session on Tuesday, an area that has been both support and resistance previously. With this, it appears that the market did in fact chew through some resistance during the day, but did not get above the actual resistance zone. I believe that the “zone” extends all the way to the 1.3750 level, and as a result I am not ready to start buying yet. In fact, I find it difficult to imagine that this market is going to continue going higher until we yet the nonfarm payroll numbers on Thursday.
Nonetheless, if we do get above the 1.3750 level, I would expect the market to continue higher at that point. After all, it would be a major break of resistance, which of course is more important than whether or not the market “should” do something or not before the numbers. After all, the markets to do in fact trying to anticipate these numbers sometimes, so it is worth paying attention to.
Pullbacks could be buying opportunities as well.
Pullbacks at this point time should be buying opportunities from what I can see. Again, it’s a bit difficult to imagine this market making a significant move before the announcement, but I really find it difficult to imagine this market breaking down drastically. I think it that a lot of support is to be found below, and as a result I much more comfortable going long at the moment. This is one of those markets that could either break out to the upside, or stay well within the consolidation area that we have been stuck in for some time.
Either we get the break out, or we stick around between the 1.35 and 1.37 levels in my opinion. In fact, if this nonfarm payroll number announcement on Thursday can’t get this market moving, it’s very likely that we could be stuck in this range during the totality of the summer, which ended up itself can be quite profitable if you are willing to look to the shorter-term charts.