EUR/USD Forms a Hammer – 09 January 2015
The EUR/USD pair dropped during the movement of the session on Thursday, and broke down below the 1.18 level. Still, we did find enough support to turn things back around and form a little bit of a hammer, so I am not necessarily looking to sell this pair right away. Indeed, with the nonfarm payroll number coming out today, I think we will make a longer-term resolution over the next 24 hours or so. However, the Euro has been sold off significantly, so we have to be careful down at these already considerably low levels.
The shape of the hammer certainly tells me that there are buyers below, and I do recognize that the 1.18 level was extremely important on the longer-term charts, as the 1.18 level has been very supportive during the monthly time periods. The market has shown major support thus five years now, so that makes this level very important.
Nonfarm payroll could settle on the next several handles:
Today’s announcements will be very important, and it is especially likely that they could determine the next several handles. However, the 1.18 level is extremely important, so if it gets broken down below, we could just start falling. The market would more than likely head towards the 1.10 level over the longer term. If that does come about, and we break down below the bottom of the hammer from the Thursday session, I would be a seller of all rallies for the time being.
As well, if we break above the top of the hammer for the Thursday session, I assume we could bounce all the way to the 1.20 level in the short-term. However, there is a gap up there that has not been filled yet, and if we can break above that level, we could go as high as 1.2350 over the course of the next couple of weeks.
While I look at the longer-term charts, I cannot help but assume we are about to make a big decision in this marketplace, so therefore I am paying quite a bit of concentration to it.