Talking Points
- EURUSD rebounds off support- Outlook bearish sub-1.0884
- Updated targets & invalidation levels
- Event Risk on Tap This Week
EURUSD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: EURUSD is testing Fibonacci support at 1.0723 with today’s mixed FOMC minutes sparking a rebound in the exchange rate. The commentary suggests the bar remains high for another rate hike in the first quarter of 2016 and as such, the dollar may face near-term headwinds as market participants reprice the trajectory of US interest rates. Nevertheless, the broader outlook for the greenback remains constructive as the more prominent FOMC members such as Vice Chair Stanley Fischer anticipates the central bank to achieve the 2% inflation goal overt the policy horizon.
Near-term resistance stands at 1.0830 backed by the upper median-line parallel / the December high-day close at 1.0924- a breach above this level would be needed to shift the broader focus back to the topside. A break of the lows targets confluence support at 1.0632 & a longer-term trendline support extending off the 2000 low ~1.0565.
EURUSD 30min
Notes: Today’s release fueled a breach above the median-line of an embedded pitchfork formation and we’re likely to get some more upside in the near-term before turning over. We will be looking for a rebound to offer favorable short entries with interm resistance seen at 1.0788 & 1.0833. A breach above the upper median-line parallel / 1.0884 would be needed to invalidate our near-term outlook.
A break below key confluence support at 1.0724/34 targets the 1.0688 pivot & the 78.6% retracement at 1.0633- note that this level converges on the lower median-line parallel into the close of the week. A quarter of the daily average true range yields profit targets of 24-27pips per scalp. Added caution is warranted heading into Eurozone data tomorrow morning and the highly anticipated Non-Farm Payrolls on Friday with the releases likely to fuel further volatility EUR & USD crosses.
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Relevant Data Releases
Other Setups in Play:
- NZD/JPY Testing Support- Outlook Remains Bearish Sub-81.40
- AUD/JPY at Support, For Now
- EUR/AUD Coils Below 1.53 Resistance- Break Imminent?
- USDOLLAR Post-Fed Rally Eyes First Hurdle- Bullish Above 12146
- Webinar: All Eyes on FOMC- US Dollar Hangs in the Balance
---Written by Michael Boutros, Currency Strategist with DailyFX
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