EURUSD trades below the 200 and 100 hour moving averages ahead of US jobs report


EURUSD on the hourly chart ahead of the jobs report

The EURUSD moved higher into the London morning session, and in the process has moved up to the 200 hour MA at 1.13152. On Monday, the price tumbled through both the 100 and 200 hour moving averages. On Tuesday the price high stalled against the 200 hour moving average. On Wednesday and again on Thursday the price traded above and below both the 100 and 200 hour moving averages, but closed the below on each day.

Today the move to the upside was able to extend above the moving average briefly and marginally (the high price reached 1.13186 with the moving average currently at 1.131526), but has since moved back to the downside and also more recently below its 100 hour moving average at 1.13027. The current price is trading at 1.1297 – below both moving averages.

That gives the pair a modestly bearish bias ahead of the US jobs report which is expected to show a 425K increase. However, as we know, the risk from the headline number is elevated.

For example, last month, the jobs report came in much weaker at 210K. The EURUSD initially spiked higher (lower USD) and above its 100 hour MA at 1.1312 to 1.13329, but quickly reversed and moved back below both its 100 and lower 200 hour MA at 1.12777 to a low of 1.12659, before spiking back higher once again.

Today the moving averages are reversed with the 200 hour moving average higher than the 100 hour moving average, but the setup is similar and there is the same volatility risk.

Nevertheless, technicals allow traders to assign a bias given the technical tools. Stay below the moving averages after the report would keep the bears more control. Move above and the buyers have more control.

On the downside, a move lower will target the 1.1271 to 1.1276 swing area followed by 1.1260 to 1.1263. Move below those levels and traders will be looking toward extreme lows between 1.1226 and 1.1233.

On the topside, moving above the 200 hour moving average will have traders targeting the high from yesterday at 1.1331, followed by the a swing area between 1.13418 and 1.13458. Get above those levels and it should open up the door for a look at 1.1354 to 1.1359.



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