Despite taking out the June 11th top at 1.4166 yesterday, the September Euro did not accelerate to the upside and even failed to close above this price. Traders would not chase this market higher ahead of today’s European Central Bank announcement and the U.S. Non-Farm Payroll Report.

Like the September British Pound earlier in the week, investors were hesitant to print the high tick when the Euro tried to accelerate to the upside. Traders may have felt that increased demand for higher risk assets was not a good enough reason to initiate new positions or add to established positions without the support of bullish economic news out of the Euro Zone.

Although this market is trading close to the high for the year, buying has dried up since the first week in June when the Euro topped at 1.4327. Overnight this market is trading at the mid-point of the June range which indicates traders are non-committal given the recent economic information. The current chart pattern suggests distribution and topping action but investors may need more information before committing to the short-side.

New information may hit the market today when the European Central Bank makes its interest rate policy announcement. Even though it has room to cut rates, the consensus believes that interest rates will remain unchanged at 1.0%. Keeping rates the same means the Euro will maintain its interest rate differential advantage over the U.S. which may prevent this market from dropping sharply, but traders are waiting for the statement from the ECB policymakers to move this market.

There is currently a deep division between ECB policymakers regarding the direction of interest rates and an exit strategy. The panel reportedly has mixed opinions about the direction of interest rates. Some believe interest rates should come down to levels consistent with other central banks to about 0 to .25%. These policymakers cite rising unemployment and slow growth as their main reasons to cut once again. Other members believe that interest rates should remain the same and that more stimuli are needed to strengthen the economy. Still others believe that the ECB should make a pre-emptive strike and raise rates because of signs of a recovery. Based on this variety of opinions, the easiest thing to do is to leave rates unchanged.

Investors will most likely be more interested in the ECB’s exit strategy should the Euro Zone economy begin to show more solid signs of a recovery. Like the Fed, the ECB is going to have difficulty deciding when to begin hiking rates. No one wants to raise rates too soon out of fear of snuffing out economic growth prematurely. Others want a quick exit in order to prevent inflation from surging as the economy picks up.

Traders will also be looking for statements regarding the appreciation of the Euro. There is talk circulating that the ECB may mention its concerns about a high priced Euro making Euro Zone exports too expensive.

If the ECB announcement does not move the Euro then this will be a sign that traders are more focused on the U.S. Unemployment Report which comes out later this morning. Traders are buying Dollars this morning for protection against a weaker than expected report. Pre-report guesses are for a loss of about 365,000 jobs. The consensus is looking for the unemployment report to jump up to 9.6%.