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EUR/USD: Post-ECB Recovery to Face U.S. NFP

EUR/USD: Post-ECB Recovery to Face U.S. NFP

Talking Points


EURUSD Daily Chart

Technical Outlook: The key focus range for Euro remains 1.0527-1.0620 heading into tomorrow’s U.S. Non-Farm Payrolls report. A breach of this region puts into focus key resistance & broader bearish invalidation at 1.0661 where the 100-day moving average converges on the 50% retracement and slope resistance. A close above this region would be needed to keep the long-bias in play and would suggest a larger-scale recovery is underway in the Euro. Keep in mind that if we close at these levels, the pair will have completed an outside-day reversal off key Fibonacci support (near-term constructive). Critical support remains steady at 1.0455/62 – a region defined by the confluence of the 2015 lows, the 1/11 swing low, the 76.4% retracement and the median-line extending off the January high.


EURUSD 120min Chart

Notes: Today’s post-ECB high registered just pips above the weekly open before pulling back, further highlighting the near-term significance of the 1.0527-1.0620range- look for the break (Ultimately, a breach is favored). From a trading standpoint, heading into NFPs I would be interested in fading strength towards 1.0661on a spike OR buying a more significant dip down towards key confluence support at 1.0455/62.

  • A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net-short EURUSD- the ratio stands at -1.06 (48% of traders are long)- weak bullish reading
  • Long positions are 8.8% lower than yesterday and 15.4% below levels seen last week
  • Short positions are 0.3% higher than yesterday and 17.9% above levels seen last week
  • Open interest is 4.3% lower than yesterday and 17.7% below its monthly average
  • While the current SSI profile continues to point higher, it’s worth noting that the recent narrowing in the ratio (flip to net-short) on falling open interest shows the retail crowd may be t thinning out here. Look for this dynamic to mature in the coming days with a further build in short positions / open interest to suggest that a more meaningful low may be in place.


Relevant Data Releases

Looking for trade ideas? Review DailyFX’s 2017 1Q Projections

Other Setups in Play:

Written by Michael Boutros, Currency Strategist with DailyFX Follow Michael on Twitter @MBForex contact him at or Click Here to be added to his email distribution list.

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