Forex Strategy - EUR/USD Open to Breakout in Absence of Reversal Signal
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EUR/USD Technical Strategy: Upside break prefers longs
Absent bearish reversal signal opens up further gains
Upcoming NFPs likely to spark break of Asian session range
As noted in yesterday’s report; the ECB rate decision stood to brush aside a number of technical readings on EUR/USD. Following an upbeat growth forecast from the central bank the Euro bulls took charge and pushed the common currency back above the 1.3800 level.
Following the break higher, sellers have emerged at the 1.3865 mark, which coincides with a test of the longer-term downward trend line on the weekly (below). This leaves EUR/USD at a critical juncture.
Intraday action has been lackluster to say the least – with prices consolidating in a narrow 11 pip range during Asian trading. We’re also yet to see a bearish reversal candlestick formation emerge which could hint at declines for the pair. An upside breakout would likely favor a continued advance and fresh multi-year highs.
Again, traders should note that key fundamental event risk looms ahead. One of the most influential data releases of the month, US Non-Farm-Payrolls, is due to cross the wires in the US session, and is likely to spark further volatility for EUR/USD.
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Hourly Chart - Created Using FXCM Marketscope 2.0
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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