EUR/USD is trading at 1.0791 and it could reach fresh new lows soon as the Dollar Index seems strong enough to climb higher. I said yesterday that the Dollar could appreciate versus all its rivals if the ADP Non-Farm Employment Change comes in better than expected, the indicator was reported at -20,236K, versus the -20,500K estimates.
The US has continued to report mixed data, some of the figures were better than expected, even if the COVID-19 crisis remains active. The Dollar index has managed to climb above the 100.00 psychological level, a further increase will force EUR/USD to drop deeper. The Unemployment Claims are expected around 3,000K in the previous week, lower compared to the 3,839K in the previous reporting period.
It remains to see how the pair will react today because it is trading right above critical support pf 1.0777 level. Tomorrow we'll have the NFP report, the Unemployment Rate, and the Average Hourly Earnings data, so maybe traders will wait for these figures before taking action.
EUR/USD has decreased aggressively after the failure to reach and retest the median line (ML) of the black descending pitchfork, it has registered only a false breakout above the 1.1 level.
The price is still trapped between the 1.1 - 1.0777 levels, so only a valid breakout from this extended sideways movement will bring a clear direction and a fresh signal. The support is at 1.0777 level and at the weekly S1 (1.0772) level, while the resistance is seen at the median line (ML) and at the 1.1000 level.
- EUR/USD TRADING TIPS
In the short term, a valid breakdown below the 1.0777 and below the S1 (1.0772) levels will signal a drop at least till 1.0653 and towards the lower median line (LML) of the descending pitchfork. Technically, the selling pressure is high as long as the price is located below the median line (ML), but you should know that only a valid breakdown below the lower median line (LML) will really suggest a major drop towards parity.
We cannot exclude a potential increase ahead of the NFP, so if EUR/USD registers only a false breakdown with great separation, pin bar / bullish engulfing, on the 1.0777 - 1.0772 area, the pair could rally towards the median line (ML). A larger upward movement will be validated only if the price makes a valid breakout above the median line (ML) and above 1.1 level.
