The EUR/USD pair got a nice boost for the session on Thursday as traders tried to get in front of the announcement of participation rates in the Greek bond swap. The market looks as if it is trying to assume that the deal will go through, and this will lift the value of the Euro in general. However, the spike in price could simply be short-term at best, as the day also sees the Non-Farm Payrolls number out of the United States, which of course is always a market moving event.
The pair has been stuck between the 1.30 and 1.35 levels, and there is nothing in the charts at the moment to suggest this is going to change. There is a bit of a “midpoint” at 1.3250 that has caused some reactions as well, so there is that minor level to pay attention to. With the Non-Farm Payroll number coming out, there is a real chance that any reaction to the Greek swap deal may be a bit muted, as the market seems to assume all has gone well. Having said that, it would make sense that the biggest risk of shock is for a downside move as a failure to make the levels needed of participation in the deal would be a bigger surprise.
The 1.31 level starts the support level down to the 1.30 level, and in times like this we prefer to see a solid daily close below the “bottom” of the area: In other words – sub-1.30 handle. The upside is going to see choppiness as well. The 1.35 level is without a doubt going to be a struggle to get over, but perhaps if the jobs number is well over 200,000 added, and the situation in Greece is agreeable – we might just be able to break out.
With the high probability of massive volatility during the session, this pair is probably better left alone until we break out of this consolidation phase, or at least Monday morning as all of the weekend headlines will be known by then.