Talking Points
- EURUSD bears to face GDP/NFPs tomorrow
- USDJPY, USDOLLAR eyeing 2014 highs
- Key levels heading into NFPs / September open
EURUSD Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- EURUSD focus remains weighted to the downside after weekly opening range break
- Key support at 1.2893-1.2902, 1.2787 & 1.2743
- Interim resistance 1.3017/19, 1.3158b & 1.3205/25- bearish invalidation
- Daily RSI continued to hold in oversold territory- bearish
- Event Risk Ahead: Eurozone 2Q GDP & US Non-Farm Payrolls tomorrow
Notes: Today’s sell-off marks the highest volume day since August of 2012 with momentum now testing its lowest levels since 2008. Near-term we’ll be looking lower while below 1.3017/19 with only breach above 1.3205/25 invalidating our broader outlook. Note that 1.22893-1.2902 represents a key area of support and short exposure into this region is at risk heading into the close of the week. If a rebound materializes off this level we’ll look to sell rallies into the monthly opening range high. A break of the lows targets the key 61.8% retracement off the 2012 low at 1.2787.
USDJPY Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- USDJPY testing key resistance / 2014 High- 105.43/58- bearish invalidation
- Breach targets 106.23, 106.85
- Interim support 104.78, 104.16/25- bullish invalidation
- Daily RSI continues to hold in overbought territory- bullish
- Event Risk Ahead:US Non-Farm Payrolls tomorrow
Notes: The breakaway gap seen at the start of this month pushed the pair through key resistance noted last month at 104.16/25. This level will now serve as our monthly opening range low and we’ll look to buy dips while above this threshold. Look for a breach of the yearly highs to target more critical technical resistance at 106.22/23.
USDOLLAR Daily Chart
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- Dow Jones FXCM Dollar Index stalling just head of 2014 high
- Key resistance 10,759/65- bearish invalidation
- Breach targets 10,812, 10,869
- Interim support 10,663, 10,639 & 10,607/11- bullish invalidation
- Daily RSI remains in overbought territory- bullish
- Ongoing divergence in momentum warns of possible exhaustion- bearish
- Event Risk Ahead:US Non-Farm Payrolls tomorrow
Notes: The greenback is trading just pips off the 2014 highs as we head into tomorrow’s highly anticipated US employment report. A breach above a key Fibonacci confluence at 10,759/65 keeps the topside in focus with such a scenario targeting resistance objectives into 10,812. I am weary of these outside reversal days at the highs as momentum continues to show ongoing divergence as it may signal near-term exhaustion. That said, the broader outlook remains constructive above 10,607 we’ll look for tomorrow’s data prints to offer a catalyst in these setups and further clarity on our near-term directional biases.
Other Setups in Play:
- AUDCHF Gap Setup- 8545 Resistance Critical
- Make or Break Time for USDCHF- Rally Vulnerable Sub 9133
- AUDJPY Targets Key Resistance - Shorts Favored Sub 96.00
- USDCAD Opening Range Play- Key Support in Focus Ahead of Jobs Data
- GBPAUD Opening Range Break - Selling Rallies Sub August High
- GBPUSD Shorts at Risk Above 1.68 Heading Into BoE, Inflation Data
---Written by Michael Boutros, Currency Strategist with DailyFX
For updates on this scalp and more setups follow him on Twitter @MBForex
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