Since late January, the buyers and sellers on the forex market have been competing for position within a major-league weekly supply at 1.2569-1.2287.
Weekly gain/loss: -0.34%
Weekly closing price: 1.2279
Formed by a strong bearish base back in late 2014, this area also brings attention to a weekly Fibonacci resistance cluster (see below for the values) and long-term weekly trend line resistance (extended from the high 1.6038) seen circling around the top edge of this zone. Downside targets from this angle fall in around the weekly support band at 1.2044, shadowed closely by the 2018 yearly opening level at 1.2004.
- 61.8% Fib resistance at 1.2604 taken from the high 1.3993
- 50.0% Fib resistance at 1.2644 taken from the high 1.4940
- 38.2% Fib resistance at 1.2519 taken from the high 1.6038
A closer look at price action on the daily timeframe, nonetheless, stations the EUR/USD currency pair at a rather exciting area of daily support drawn from 1.2246-1.2164. Notice how the zone communicates beautifully with a long-term daily trend line support etched from the low 1.0569 – has capped market action since late January – and also rebounded price on Friday in the shape of a daily bullish engulfing formation.
The impact of Friday’s US employment figures sent the euro higher against its US counterpart. The US economy created 103K jobs during March, missing consensus at 188K and down from February’s 326K number (revised from 313K). Also weighing on the US dollar was the US unemployment rate which reported a slight increase at 4.1% vs. expected 4.0%. As you can see from the H4 timeframe, Friday’s move wrapped up the day closing 20 pips shy of the 1.23 handle, shadowed closely by a 38.2% H4 Fib resistance at 1.2314 and April’s opening level at 1.2320.
Potential trading zones:
Medium/long-term moves are somewhat restricted at the moment. On one hand we have weekly flow threatening a push lower, and on the other hand we can see that daily price is potentially looking to cement another rally from its daily support area.
Short-term action going into Monday will likely be quiet given the light economic docket. A move up to 1.23, nevertheless, is possible. Should you consider attempting to fade this number, remain cognizant of the overhead H4 levels highlighted above, as these could encourage price to run stops sitting above the psychological level, as it did during the early hours of Wednesday’s session (see red arrow).
Data points to consider today: No high-impacting events scheduled for release.
Analysis provided by IC Markets
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