Forex Technical Update

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Non-Farm Payroll: There was 103K additional private sector jobs in September, better than the 55K forecast. August data was revised up from 0 to 57K.

1.3520 Tested: The EUR/USD rallied sharp in the minutes after the better than expected Non-Farm Payroll. This rally brought the pair to the 1.35-1.3520 central pivot zone from the previous week. The 4H chart shows that there is an initial rejection there. It will be important to see how the market closes today, whether it will push above this 1.3520 pivot or not. The ability to do that is indication that bulls still have the market in the short-term. The 4H chart shows that this would also clearly cross the 61.8% retracement of the decline since last week, and also above a declining trendline. Also note that the RSI would be pushing above 60, reflecting a loss of the bearish momentum that started the week.

On the other hand, a close below 1.3450 reflects a failed bullish attempt, while a break below 1.34 will indicate bears taking over in the short-term. The market will still be in consolidation until a break below 1.3150. If you break down the range EUR/USD set up this week between 1.3520 and 1.3150, you can see that this week's central pivot is near 1.3330. So below 1.34, the near-term bearish outlook is to 1.3330, Below 1.33, we open up 1.3150.

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Fan Yang CMT
Chief Technical Strategist