ICmarkets

EUR/USD: Technical outlook and review...

FX:EURUSD   Euro / U.S. Dollar
709 0 8
Isn’t that a sight for sore eyes! The single currency surged over 460 pips as the ECB surprised the markets yesterday by extending its asset program, but not expanding monthly purchases. On the docket today, however, we have the mighty NFP release which could shake things up further. The question we’d all love the answer to now is can this recent surge in buying be sustained, or is it just a correction in the wider scheme of things?

Technically, this acceleration north took out a bundle of H4 resistances, with price ending the day stabbing above supply seen at 1.0969-1.0944. In addition to this, we can see that weekly action is now trading back within its current range between demand at 1.0519-1.0798 and supply drawn from 1.1532-1.1278. Meanwhile, down on the daily chart , price is now lurking just beneath supply coming in at 1.1072-1.1013. Downside targets from here fall in at the swap support taken from 1.0813.

As a rule, we never trade during news. As such, we’re going to be watching the following H4 areas pre/post-NFP today:

• Large psychological resistance 1.1000. As tasty as this level appears, traders should note the H4 supply lurking above it at 1.1029-1.1010. Furthermore, this supply is positioned nicely within the aforementioned daily supply, so be prepared for some fakeouts here guys (waiting for lower timeframe confirmation highly recommended).

• Psychological supports 1.0900/1.0800 along with the swap support level seen at 1.0830. The 1.0800 figure is the more attractive of the two in our opinion seeing as how it converges nicely with the daily swap (support) level mentioned above at 1.0813. Again, waiting for confirmation here is recommended due to the high possibility of some very nasty fakeouts today.

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