In these lines, Romeo has just laid eyes on Juliet, and he is stunned by what he describes as her radiant beauty, which he first compares to a flame and then to a precious jewel:

O, she doth teach the torches to burn bright! 
It seems she hangs upon the cheek of night 
Like a rich jewel in an Ethiop's ear— 
Beauty too rich for use, for earth too dear!

After the dance is over, Romeo (despite being in a house full of Capulets) decides that he will risk approaching her and taking her hand:

The measure done, I'll watch her place of stand 
And, touching hers, make blessed my rude hand. 

Romeo is clearly smitten with Juliet, and despite the fact that his friends chide him for his other dalliances with women, it seems obvious that even the fickle Romeo is in love with Juliet:

Did my heart love till now? Forswear it, sight! 
For I ne'er saw true beauty till this night!

The interesting aspect of this scene is that as Romeo is struck by Juliet's love, Tybalt recognizes him. The hotheaded young Capulet wants to kill him then and there, but Juliet's father forbids it. Tybalt angrily leaves, foreshadowing the problems that are to come between him and Romeo. In the end, it could be argued, Capulet's decision to restrain Tybalt costs his daughter her life.