Talking Points
EURUSD bears to face GDP/NFPs tomorrow
USDJPY, USDOLLAR eyeing 2014 highs
Key levels heading into NFPs / September open
Major event risk on tap tomorrow
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
EURUSD focus remains weighted to the downside after weekly opening range break
Key support at 1.2893-1.2902, 1.2787 & 1.2743
Interim resistance 1.3017/19, 1.3158b & 1.3205/25- bearish invalidation
Daily RSI continued to hold in oversold territory- bearish
Event Risk Ahead: Eurozone 2Q GDP & US Non-Farm Payrolls tomorrow
Notes: Today’s sell-off marks the highest volume day since August of 2012 with momentum now testing its lowest levels since 2008. Near-term we’ll be looking lower while below 1.3017/19 with only breach above 1.3205/25 invalidating our broader outlook. Note that 1.22893-1.2902 represents a key area of support and short exposure into this region is at risk heading into the close of the week. If a rebound materializes off this level we’ll look to sell rallies into the monthly opening range high. A break of the lows targets the key 61.8% retracement off the 2012 low at 1.2787.
USDJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
USDJPY testing key resistance / 2014 High- 105.43/58- bearish invalidation
Breach targets 106.23, 106.85
Interim support 104.78, 104.16/25- bullish invalidation
Daily RSI continues to hold in overbought territory- bullish
Event Risk Ahead:US Non-Farm Payrolls tomorrow
Notes: The breakaway gap seen at the start of this month pushed the pair through key resistance noted last month at 104.16/25. This level will now serve as our monthly opening range low and we’ll look to buy dips while above this threshold. Look for a breach of the yearly highs to target more critical technical resistance at 106.22/23.
USDOLLAR Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
Dow Jones FXCM Dollar Index stalling just head of 2014 high
Key resistance 10,759/65- bearish invalidation
Breach targets 10,812, 10,869
Interim support 10,663, 10,639 & 10,607/11- bullish invalidation
Daily RSI remains in overbought territory- bullish
Ongoing divergence in momentum warns of possible exhaustion- bearish
Event Risk Ahead:US Non-Farm Payrolls tomorrow
Notes: The greenback is trading just pips off the 2014 highs as we head into tomorrow’s highly anticipated US employment report. A breach above a key Fibonacci confluence at 10,759/65 keeps the topside in focus with such a scenario targeting resistance objectives into 10,812. I am weary of these outside reversal days at the highs as momentum continues to show ongoing divergence as it may signal near-term exhaustion. That said, the broader outlook remains constructive above 10,607 we’ll look for tomorrow’s data prints to offer a catalyst in these setups and further clarity on our near-term directional biases.
Other Setups in Play:
AUDCHF Gap Setup- 8545 Resistance Critical
Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
AUDJPY Targets Key Resistance – Shorts Favored Sub 96.00
USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
GBPAUD Opening Range Break – Selling Rallies Sub August High
GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
—Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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Source: Daily fx