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The EUR/USD looks absolutely horrible after the action on Thursday. We initially had a Spike all the way to 1.24 levels, only to be reversed by the end of the day to close below the 1.22 handle. In fact, we had actually lost more than that, but short covering at the end of the day made things not so drastic. The truth is however, that the nonfarm payroll number coming out today probably saved the euro from a serious meltdown. Not many traders will want to have been in the market before the announcement.
At this point in time, no matter what happens with nonfarm payroll Friday we believe that the Euro will be a currency to be sold on rallies. Any signs of weakness between here and 1.27 could be potential selling signals. Of course, we could also meltdown after the nonfarm payroll announcement which of course would be bearish as well. There is absolutely no reason whatsoever to buy the Euro at this point in time.