Daily Forex Technicals |
Written by FXTimes |
Apr 06 12 14:39 GMT
EUR/USD - Can the Initial Bullish Reaction to Poor NFP Extend? Where?
The Non-Farm Payroll came out 120K, badly missing the 209K forecast. This caused risk aversion, which normally gives USD strength. However, this release brings in the conflicting factor that stimulus might be needed (reversing the expectation the FOMC meeting minutes laid out on Wednesday 4/4). Therefore, the market sees the risk aversion more purely in the Japanese Yen. But for the EUR/USD, we see a sharp rally from 1.3045 to 1.3109 in the first 15-minute-reaction to the NFP. Can this extend?
Looking at the 15-min chart, are seeing a throwback. If the market breaks below 1.3070 (61.8% retracement), the at least short-term bullish outlook from the reaction will not be as clear. Staying above 1.3070, and pushing back above 1.3110, the market opens up the 1.3160 pivot seen in the 4H chart. This is also the 38.2% retracement of this week’s dip from 1.3377 to 1.3031.
A break above 1.3165 opens up 1.3240/50 area (61.8% retracement). We should watch for the area around 1.3250 as a key resistance cluster. If the initial 15-min bullish reaction gets completely faded, we would be looking at a very bearish dynamic. In the short-term, we should then look at the 1.2970-1.30 level as possible support. A break below 1.2970 opens up the 1.2880 pivot and then the 1.2624 2012-low.
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