The euro is on its way lower today, but we think this will reverse soon
Just as we are awaiting for the latest batch of data to paint a more detailed picture about the labor market in the United States, we are taking a look at the EUR/USD pair to assess what opportunities we can get from the number released and what is more likely to happen until the end of the trading day.
Currently we are seeing the EUR/USD pair trading around 1.2617, which is towards the lower side of the range from yesterday. The levels around 1.2610 have been tested numerously after the release of the latest batch of European Central Bank's communication, however as of right now we don't think the EUR can go much lower.
We will focus our efforts on two directions providing different opportunities to different types of traders in our daily forecast. First we are going to have a look at the more risky scenario - taking a trade before the U.S. non-farm payroll numbers are released.
For those of you who are more risky players we are of the opinion that current levels around 1.2615 can provide a great call buying opportunity for the EUR/USD if we look at the expiry for tonight - around 20:00 GMT. On the other hand should we see a very strong n-n-farm payrolls number, we can see an even better opportunity.
Here is the second scenario - if you wait out for the big data number which will move markets at 12:30 GMT, and it is below 250,000 - this is a great time to buy calls in the EUR/USD pair. However if we see an even stringer number risks will escalate.
If we see an hourly close below 1.2550, there is scope for the European currency to drop even more and break through to the 1.2500 area. We see this scenario as less likely for now, but have it in mind when taking your trading decision this afternoon.