Highs from March correction at 1.1051 eyed above

The US jobs data on Friday put the kabosh on the dollar strength idea.

With shorts in the EUR reaching a new record (see Commitment of traders report) and the employment now matching the weakish US data seen in the 1st quarter, the market will be following the data points going forward. The Fed has said they want to start normalizing rates in 2015 but are data dependent. Right now, that story is not changed (there is a number of months before the end of 2015 to get a tightening in or two). The question is "will the shoots of spring, bring about a resurgence of growth in the US following the weak 1Q?" and if so, "what does that do to the Fed schedule?" It would seem, June in too close now. July....maybe. September is certainly doable. If the data is not supportive of a liftoff (i.e. employment next month does not show a rebound), that can be a problem for a tightening schedule by September.

What about the EURUSD? With Fed uncertainty rising up a notch, that will keep the focus on the price clues and the technicals.

Looking at the 4 hour chart above, the 200 bar MA (green line in the chart above) comes in at 1.0948. The broken trend line comes in at 1.0936. This area will be a "line in the sand" for the week. Stay above and the buyers remain in control. Move below and the market is likely to question the recent bullishness. NOTE: the move above the 200 bar MA on the 4 hour chart on Friday was the 1st break above that MA line since mid December 2014. So it is a significant break from a technical perspective.

On the topside,

  • the high from Friday at 1.10256 is the next target,
  • followed by the 1.1035 high from March 18 and
  • the 1.1051 high from March 26.
  • The low from January 2015 comes in at 1.1097 and would be another upside target.
  • Finally, the 1.1209 is the 61.8% of the move up from the 2000 year low to the 2008 year high.

I would think if the price can continue to squeeze higher, the 1.1209 level would be a nice level to stall the rise.

Overall, the buyers are in the drivers seat.

NOTE: Last year on Easter Monday the EURUSD had a 36 pips trading range in the No American session. So don't expect much. Just an FYI