EUR/USD Approaching Initial Support- Levels to Watch for NFPs
- EURUSD reversal approaching initial support targets
- Move lower to offer long-entries
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: Euro reversed off a major resistance confluence early this week at 1.1589-1.1614. This level is defined by the 1.618% extension of the advance off the December low, the August high-day close, a pivot-line extending off the March 2015 low and a basic median-line extending off the 2016 low. The subsequent reversal is coming into near-term support ahead of tomorrow’s U.S. Non-Farm Employment report and a rebound could offer favorable entries for a push lower in the pair.
Initial resistance stands at 1.1443/56 backed by the August reversal-day close at 1.1512 (near-term bearish invalidation). Interim support rests with the October reversal-day close at 1.1385 backed by the February high-day close at 1.1320. Ultimately we would be looking for long entries on a move back towards the lower median-line parallel extending off the March low.
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Notes: The pair is been tradaing wihtin the confines of a near-term descending channel formation off the highs with the decline appraching initial support at 1.1382/85 backed closely by more significant support at 1.1356/67. I would be expecting some kickback from one of these levels heading into the release with the immediate downside bias in-play while below the May high-day close at 1.1443.
A break lower eyes subsequent support objectives at 1.1309/20 backed by the the 1.618% extneison at 1.1291. Added caution is warranted heading into the NFP release with the event likely to fuel increased volatility in the USD crosses. A quarter of the daily average true range (ATR) yields profit targets of 21-25 pips per scalp. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
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Relevant Data Releases
Other Setups in Play:
- GBP/USD Reversal Approaching Initial Support Targets
- NZD/USD Fails at 2016 High Ahead of Labor Report- Bearish Sub 7025
- USD/CAD Outside Day Reversal Off Key Support- Long Scalps in Play
- AUD/USD Scalp Targets Ahead of RBA- Watch 7590
- USDOLLAR at Critical Inflection Point Heading Into May Open, NFPs
---Written by Michael Boutros, Currency Strategist with DailyFX