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The EUR/USD is Trading Flat Pending ISM Data

The EUR/USD is Trading Flat Pending ISM Data

Walker England, Forex Trading Instructor


Talking Points

  • The EUR/USD Moves to Resistance on ADP Figures
  • Bullish Breakouts Begin Over the R4 Pivot at 1.1561
  • Sentiment Remains at a Negative Extreme, Reading -2.24

EUR/USD 30 Minute Chart

(Created using Marketscope 2.0 Charts)

What’s next for the Euro? Find out more with our analysts Free forecast!

The EUR/USD is moving off of resistance this morning after an early advance in price on ADP employment figures. ADP was released at 156k vs an expected 195K. Now with prices trading back towards today’s central pivot, traders will be looking forward to US ISM Non-Manufacturing data to provide direction for the pair. Expectations for the event are set at 54.8, and as a high importance event may directly affect US Dollar based pairs.

Price action for the EUR/USD is still considered range bound as it continues to trade under today’s R3 pivot at a price of 1.1528. If prices fail to break higher, the EUR/USD may begin to decline towards key values of support. Today’s range measures 67 pips, placing the S3 pivot at a price of 1.1461. If prices fail to break from these points during the previously mentioned ISM release, traders may continue to use these values to look for range based trading opportunities.

Traders looking for a breakout should continue to focus on a move above the displayed R4 pivot either at 1.1561 or below the S4 pivot at 1.1428. A move above R4 would suggest that the EUR/USD is poised to continue its daily uptrend, and potentially challenge yearly highs at 1.1616. A decline below S4 would be significant, as it would represent the first attempted bearish pivot breakout in the last 10 trading sessions. In this scenario, traders may look for a 1X range extension to find preliminary bearish breakout targets near 1.1361.

Find out real time sentiment data with the DailyFX’s sentiment page.

Sentiment for the EUR/USD remains extreme as SSI (speculative sentiment index) reads at -2.24 this morning. . This value has continued to shift towards further negative extremes, as last week’s SSI reading came in at -1.73. With 69% of positions currently long, traders may use this SSI reading to validate any advances in price. If prices do breakout lower today, it would be expected to have SSI move back from its extreme reading. A move back towards a more neutral figure or even a flip in sentiment may suggest a potential change in the pair’s direction.

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See Walker’s most recent articles at his Bio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.