Pre-NFP Analysis - 1.1090 critical

FX:EURUSD   Euro / U.S. Dollar
2450 5 34
Tomorrow morning at 8:30a ET, the US Non Farm Payroll report is scheduled to be released. This could impact the EURUSD             as the USD has been strengthening on the heels of a strong payroll report in November.

With today's post -ECB move knocking on the door of 1.1090, we have a critical level of which we can consider trading around.

First off, if prices remain below 1.1090 (the early September low), then it is possible they could retest 1.05 over the coming days.

The simplier result is that if 1.1090 is breached, then it locks in a 3 wave move from August to yesterday. That is important because it eliminates an impulse from August 24 high and elevates the probability of a retest of the 1.17 high.

Bulls need not go blindly in (nor should you ever do so) as another lower probability pattern is that Aug 24-Dec 3 was wave 1 of an ending diagonal . That pattern will likely rear its head around 1.14-1.15.

So bottom line, a break above 1.1090 is reason for bulls to get excited as several patterns point to multiple hundred pips higher.

DailyFX's Speculative Sentiment Index is shrinking as prices have been rising today. This adds more fuel to the bullish story as SSI             is a contrarian tool. It currently sits near -1.84 as the number of short traders is growing.

To watch Speculative Sentiment Index in real time, click HERE.

Read page 10 on the Traits of Successful Traders report on how tweaking the leverage improved traders profitability from 29% to 40%. Download here with free registration.

Lastly, be mindful of the seasonal liquidity strains...especially considering tomorrow is a major news announcement. Read more HERE.
what an amazing chart, wish you could explain strategy you use for figuring out these levels!!!
Earlier today in the US Opening Bell webinar, we laid out 3 potential patterns. Two of them suggest a drop down towards 1.06-1.07. From there, bullish opportunities exist. We'll discuss if we get to 1.06-1.07.
thanks jeremy. I am newbie. I am learning with your explains and shared web links
Thank you Saleri - best of luck and feel free to ask questions!
This is a great chart Jeremy. Everyone should be aware of the volatility produced by NFP along with the affects of leverage when trading the news.
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