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Will EUR/USD Break the Key Resistance at 1.1040?

The USD ended last week slipping after the disappointing US Non-Farm Payroll jobs report. The report showed that only 126K jobs were added in March, while economists had forecast a print around 246K. Meanwhile, the February figure was revised down to 264K from 295K. The FOMC's plan to raise rates mid-year could be thwarted by the lackluster labor market so far this year.

The EUR/USD and GBP/USD are major currency pairs that saw a strong move against the USD. Let's take a look at their key technical levels as we start the 4/6 US session.

EUR/USD 4H Chart 4/6

(click to enlarge)

The 4H chart shows a market trying to build a price bottom and Friday's jobs report should help the pair do so. However, we should also consider the fact that the ECB is in full stimulus mode right now, and even if there is a price bottom, EUR/USD should remain bearish in the medium-term.

In the very short-term the 1.1040 level is key resistance. A break above should open up the 1.1270- area, which is a previous resistance. We should limit the most aggressive bullish outlook at the momentum to the 1.1450-1.1490 area, a previous support/resistance zone.

On the other hand, if price still fails to clear 1.1040 and falls back below 1.08, we should look for a bearish continuation attempt to test and break below the 1.0462 low on the year. Also look for the RSI to break below 40 in the bearish continuation scenario, because that would reflect a loss of the bullish momentum established since the rally from 1.046