EURUSD Technical and Fundamental Analysis
Key Risk Events Today
Canada Trade Balance; US Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate; US Revised UoM Consumer Sentiment.
A combination of profit taking on the dollar ahead of 99.00, US President Trump announcing (via Twitter) intentions to raise tariffs on Chinese imports in September (triggering a market-wide risk off move) and less-than-stellar US ISM manufacturing PMI data provided some much-needed respite for Europe’s single currency Thursday.
Leaving key figure 1.10 unchallenged, though finding a floor off H4 channel support extended from the low 1.1101, the euro advanced to a 38.2% H4 Fibonacci retracement value at 1.1090 vs. the dollar, a few points shy of 1.11. Indicator-based traders may also wish to acknowledge the H4 RSI is seen rotating from oversold territory.
In terms of higher-timeframe flow, weekly action remains in a vulnerable position having recently crossed beneath the lower edge of long-standing demand at 1.1119-1.1295.
In the event further selling is observed, the 2016 yearly opening level at 1.0873 (support) is next in the firing range. With respect to daily structure, however, a near-perfect hammer pattern formed yesterday that whipsawed through the lower edge of a demand area coming in at 1.1075-1.1171, a barrier seen hugging the underside of the current weekly demand zone. Further downside from here may entail making a run for demand at 1.0860-1.0954 (not seen on the screen), whereas a move higher has supply at 1.1322-1.1268 to target (merges with the 200-day SMA).
Areas of Consideration:
With weekly demand at 1.1119-1.1295 under pressure, despite daily demand at 1.1075-1.1171 remaining in the fold (just), a sell from the 1.11 handle could be an option today, with protective stop-loss orders positioned above nearby H4 channel resistance (etched from the high 1.1282) and an initial take-profit target set at yesterday’s low 1.1026.
Conservative traders concerned by recent action on the daily timeframe may opt to wait for additional candlestick confirmation to form before pulling the trigger (entry and risk levels can then be determined according to its structure).
EURUSD Technical and Fundamental Analysis by Superior 4X & IC Market