The expectations are in. The EURUSD consolidates near technical level.
Adam has presented the preview of the report from a fundamental standpoint.
Technically, the EURUSD has positioned itself near key technical levels. On the topside,
- 1.1226 - 100 hour MA (blue MA line in the chart above)
- 1.12395 - 100 day MA (overlayed blue horizontal line in the chart above)
- 1.12893 - High from last week/high from May 1
- 1.1316 - corrective low from May 6
- 1.1356 - old trendline starting from April 3 connecting to May 1st high.
Current price 1.1220. On the downside,
- 1.1219 - Trend line off April 23 low
- 1.11678 - 200 hour MA (green line in the chart above)
- 1.11137 - 38.2% of the move up from the April 23 low
- 1.1065 - Low for the trading week
The 100 day MA - although close - will be a key line in the sand for bullish and bearish bias. On a weaker number, and a break higher, that level should become a risk level. Stay above bullish, move back below and something is up. A bit higher is the 1.1289 resistance. This is the high from last week and also was a corrective high in yesterday's move lower.
On the downside, the price has remained above the 200 hour MA since April 23rd. That is one of the longest string of days above that MA in a long while. So a move below that MA line at the 1.11678, should then provide a new ceiling for traders (expect lower levels going forward).
What to be on the lookout for....
Be cautious of a whipsaw from a combination involving a weak NFP but a stronger earnings. As pointed out by a reader in a comment yesterday, as time goes on, jobs will be harder to replicate the 260K average in 2014 as the jobs become more scarce in certain industries. That scarcity will show in wage data. So if that combination shows up in the data, look for a dollar selling followed by dollar buying.
Event and liquidity risk is added to the market risk always present in the release of a key economic report. So adjust your trading to such risks. So wait until the risks are more in line with your tolerance (i.e., get all the facts and have the liquidity choppiness become more smooth). There will ALWAYS be another trade against a risk defining level (i.e. trend line, MA or key Fibo level). Good fortune with your trading.