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!
Check out SSI to see how retail crowds are positioned as well as open interest heading into the tomorrow’s key event risk.
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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
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.