The EURUSD fell below the trend line support on the daily chart yesterday (see daily chart above). The fall below increases the bearish bias for the pair as we await the US Employment data at 8:30 AM ET. The level comes in at 1.2443.
Looking at the hourly chart, the price broke channel support at the 1.2479 level. The underside of that broken trend line comes in today at 1.2444 today.
So needless to say, staying below this trend line will be key for the bears on any rally higher off the number today. A move above would be bullish for the pair.
If the number keeps the pressure on the EURUSD, the bears would have the incentive to march the price lower. With the high to low trading range at a whooping 37 pips, there is room to roam. The 1.2286 low from June 1 would be the next key target for the pair. Other support will come in 1.2252 (a low floor area from the last time the price was in this area in June 20110), and 1.2200 (bottom trend line on the daily chart). An important level to remember is 1.2130 which is the midpoint of the EURUSD lifetime range. The last time the price approached this area, there was early support buyers at 1.2143/51 area. I would expect on the first test of this key level, traders would do the same.
On the topside, a break back above 1.2406 level (low for June, has not been above after breaking below the level yesterday), will next target that key 1.2245 area outlined above). A move above this key level should increase upside momentum for the pair.
The 1.24887 is the 38.2% of the move down from the June 29th high (see hourly chart) and will be the next upside target. A move above this level next target what is a trio of resistance against the 200 hour MA (green line in the chart below at 1.2521), 100 hour MA (blue line at 1.2525) and the 50% retracement of the move down from the June 29th high (at 1.25275) . If the market should reach these levels (and it is possible over time), expect profit taking on the first look.
There will be event, liquidity and market through the number but as the numbers are digested, the liquidity and event risk lesson. From this point, the market should start to use the above mentioned technical clues to define and limit risk.
