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EURUSD Bearish Bias Towards Crucial Support After Strong US Wages

EURUSD Bearish Bias Towards Crucial Support After Strong US Wages

Justin McQueen, Strategist

EUR Analysis and Talking Points

  • EURUSD Eyes Key Supports Following Strong US Wage Growth
  • Another Reduction in USD Longs Signal Potential Top

EURUSD Eyes Key Supports Following Strong US Wage Growth

The Euro remains under pressure this morning and looks to press for lower levels towards the psychological 1.15 support area. Friday’s NFP reading saw wage growth rising at its fastest pace since 2009 at 2.9%, consequently rate differentials continue to move in favour of USD buying vs. the Euro as markets begin to expect a faster pace of tightening from the Federal Reserve. As it stands, money markets have fully priced in a September rate rise, while December rate hike odds are at 70%.

Another Reduction in USD Longs Signal Potential Top

Eyes are on the psychological 1.15 support area which could curb for losses in the pair with 2.1bln worth of option expiries potentially keeping the pair buoyed. Elsewhere, notable Fibonacci support sits at 1.1518 which marks the 50% Fibonacci retracement of the 1.13-1.1733 rise, while CFTC data showing another reduction in USD longs, suggest that the US Dollar could potentially have topped out.

EURUSD Bearish Bias Towards Crucial Support After Strong US Wages

EURUSD PRICE CHART: Daily Time-Frame (June-September 2018)

EURUSD Bearish Bias Towards Crucial Support After Strong US Wages

Chart by IG

EURUSD Technical Levels

Support 1: 1.1518 (50% Fibonacci Retracement)

Support 2: 1.15 (Psychological Level)

Resistance 1: 1.1568 (38.2% Fibonacci Retracement)

Resistance 2: 1.16 (Psychological Level)

KEY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

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