The forex markets are quiet. Last day of summer before ALL kids go back to school (my son is 1 month into it but east coast schools head back after Labor Day on Monday). Traders may come back to work as well, but before then we have a little thing called the NFP and it is not only a push for the day but apparently for the Fed (it may also push the stock market as well).
The ranges are all narrow (with the exception of the USDJPY - see chart above). The EURUSD and GBPUSD lead the pack with a whooping 46 and 45 pips. So with markets stalled, what are the target levels on a bull or bearish report for the EURUSD
A stronger/bullish report. I think a bullish report - even though 217K is expected
- is anything that has a 200K/5.2% or better/positive revisions. My thinking is that the Fed has so backed itself into having to liftoff that they will look at breadth of the consistent gains, the low unemployment rate and just go for it. Now when I "think" it really does not matter. What matters is the "Market" and the price action vs. tech tools. In other words does the EURUSD go lower?
ON the downside, the following targets include:
- 1.11122: This is the 100 day MA. Yesterday the price dipped below but moved back above by the close. Get below. Stay below.
- 1.1086: The low from yesterday. That low stalled near a low trend line on the hourly chart.
- 1.1079: Not far from the 1.1086. So both can be combined.
- 1.1010-21: This area goes back to August 11-August 19th on the hourly chart. There were lows at this area. A move to 1.11010 would make a 150 pip trading range for the day. This is a doable target on a better number/tightening Fed.
- Below 1.1000. Natural level should be used by traders to define and limit risk on a break back below.
On the upside.
- 1.11648: This is the 50% of the move down yesterday. Draghi pushed the EURUSD lower on his dovish comments and the ECB lowering of the GDP and Inflation outlooks. Get above and stay above
- 1.1180. Low from Monday NY session
- 1.1217: 100 hour MA (blue line in the chart above). Yesterday and on Wednesday NY session that MA was the ceiling. Key level. To get to the 100 hour MA, that would be 105 pip range. Not that big but if the number is ambiguous (i.e. 190Kish), than that might be the ceiling.
- 1.1243: High from yesterday.
- 1.1255: Underside of broken trend line
- 1.1278: This would be a stretch but it equals the 200 day MA AND the 200 hour MA. So a double 200 test. Nice and juicy level there.
These levels are what I see, and what I expect lots of smart traders see as well as targets. Risk can be defined against them. Risk pre-report is high, however. Trade accordingly We are not gamblers. We don't know what the numbers will be nor what is priced in. There is the uncertainty from the Friday/end of summer/China has been off (what does it do for their stock market on Monday) that could cause continued choppiness. Traders - who may be working - may also be looking to exit stage left early to get to the beach one last time.
Good fortune with your trading