Free Profitable Forex Newsletter
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Busy Trading Till The End Of The Week; Wait For NFP Before Selling USD
It is a busy week in the Forex market and volatility has spiked up as result already, although the ECB meeting today and the Non-Farm Payrolls are still ahead of us.
The USD was sold aggressively after worse than expected data, but traders were quick to realize they may be getting ahead of themselves and the greenback yesterday struck back after robust ISM services data.
The first target of the trade in Silver (XAGUSD) that was sent last week was reached and there is potential for the other targets to be reached too if the USD sell-off continues.
The EURCHF trade from two weeks ago has reached the entry point and we are now looking for a bounce, though there are risks to this trade going into the ECB meeting today. However, if risk sentiment improves generally (on the US trade wars front) then we can except EURCHF to recover higher toward the upper end of its 1.1150 - 1.1450 range.
EURUSD Could Surge On NFP & Jobs Weakness In The USA
It is a critical week for the EURUSD pair, and we are already seeing that Forex traders are ready to sell the US Dollar as soon as they have reasons to do so. However, no conclusions can be made before the all-important Non-Farm Payrolls data is released tomorrow, so till then, USD pairs are likely to consolidate.
The ECB will retain a dovish bias at its meeting today and is expected to announce some new stimulus measures to help the economy, so the Euro currency won’t find much support from the ECB.
For EURUSD it is all about the USD side and the expectations for Fed rate cuts this year. The markets are already pricing a 0.25% Fed rate cut this year and those expectations drove the recent USD sell-off. If the jobs data and the Non-Farm Payrolls tomorrow confirm weakness in the US economy, those expectations for rate cuts will intensify and the USD selling will likely intensify too.
Depending on the outcome and market reaction to the ECB meeting today and the NFP tomorrow, we may finally see some sustainable breakouts in EURUSD and other USD pairs. But, untill we see the evidence it would be early to make conclusions.
Yesterday’s strong rejection at the 1.1300 resistance confirms that the pair may not be ready for a strong breakout yet. This high now remains key resistance together with the 200-week moving average found at 1.1345.
With yesterday’s rejection of the highs, EURUSD has returned inside of the wedge pattern on the weekly chart and if the week closes here or at lower prices, that will be a bearish sign.
On the other hand, if jobs data and the NFP disappoint tomorrow, then EURUSD would likely close above the weekly resistance which could open the way for further gains in the EURUSD pair.
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