Last week, EUR/USD was able to form a price bottom, break above it, and then confirm the price bottom as support. I was looking for a break above the resistance area around 1.0950 to bring EUR/USD to 1.10 before resistance. The market did push the pair above 1.0950 and started selling just under 1.10.
1.09 is key support:
- The 4H chart shows the bullish break last week and the retreat to start this week.
- Note that if price falls to about 1.0920, there will be a rising trendline as well as a 50-period simple moving average (SMA) in the 4H chart.
- A break below 1.09 would clear these support factors, as well as the support/resistance pivot, around 1.09.
- A break below 1.09 therefore opens up bearish continuation with 1.0850 and lower in sight.
- If we do see buyers at 1.0920, EUR/USD has a chance to test the resistance pivot around 1.1050 this week.
- There is not going to be many fundamental events for the euro.
- Friday's US Non-farm payroll is probably the most important event risk this week from the USD side.
- It appears that the market is fading back some USD-strength in anticipation to another NFP report to miss forecast. (it has been relatively weak and below expectations the last couple of months).