EUR/USD Forecast December 7, 2012, Technical Analysis

The EUR/USD pair fell rather precipitously during the Thursday session as ECB Chairman Mario Draghi suggested that there was more demand out of the ECB members for a rate cut, and that growth will be smaller than projected over the next couple of years. Because of this, the Dollar gained against the Euro and hints that the interest-rate differential will continue to decrease should continue to push this currency pair lower over the longer-term.

We had wondered whether or not this market can get above the 1.3150 level and it now looks like that level should hold true. Having said that though, we do see significant support all the way down to the 1.29 level and today is nonfarm payroll Friday. Because of this, we will not initiate a new position at this point time and wait until we get a close to decide which traction to trade on Monday.