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EUR/USD Has a V-Shape Bounce

Today, we saw a whiplash reaction to the US NFP report. The USD/CAD and USD/JPY for example showed that the market was initially USD-positive and reversed that in the few hours after the jobs data was released.

EUR/USD 1H Chart 8/7
(click to enlarge)

The 1H chart shows that price was stopped around 1.0850 earlier this week. When the US NFP report was released, price dipped towards this level but immediately rebounded. It looks like a break below 1.0845 at this point will open up the floodgates with the 2015-lows of 1.0460-1.0520 in sight. But before that, there is upside risk back the 1.0995-1.10 resistance area. Then, above 1.10, the 1.1113 high from last week would be in sight. The bullish outlook should be limited to these couple of levels in the near and short-term because the medium-term outlook remains bearish.