US dollar hammered after dismal non-farm payrolls that disappointed investors
The single European currency is staging an impressive rally today after the US data disappointed investors all over the board. The numbers came out at a mere 74,000 jobs created during the final month of last year and are introducing some uncertainty about the FED's tapering efforts.
Virtually all major currencies are trading higher against the dollar today but we will take some special time to analyze the latest move in the EUR/USD binary options forex pair.
The pair drifted in very tight ranges for the most part of the day before the data release, marking a low of 1.3570 in the thin liquidity window just before the employment data release at 13:30 GMT. Subsequently it spiked as high as 1.3665, almost 100 pips in the matter of seconds.
The negative data obviously took its toll on US dollar bulls and we are of the opinion that more gains are warranted in the coming days. We are buying hourly and daily calls at current levels around 1.3645 waiting for more upside.
Next week can see the pair above 1.37 again if we manage to close today above 1.3670. We will buy weekly calls too provided that the momentum with the euro is maintained. Yesterday's comments from Mario Draghi were not surprising in any way, so we don't really think there should be a mojor impact on the Euro.
He communicated at the ECB's press conference that inflation data from the Euro Zone is only temporarily below 1% and that the governing council is expecting numbers to pull back up as the year progresses. In addition he reiterated that the data from Germany was distorted due to changes in methodology.
So next month will be very important on the inflation data front for the Euro Zone. Keep a vigilant eye on January's CPI when its released in February. Meanwhile we reiterate that the next couple of days could see the Euro higher as it now has broken through the previous hourly high as we were writing this piece.