On Thursday euro strengthened against US dollar and the pair reached maximum values since last November on the level of 1.0980. The European currency was supported by positive statistics: EU Services PMI reached the level of 56.4 points in April, and March growth of retail sales appeared to be higher than expected and made up 0.3%. Moreover, investors were supported by the results of the last TV debates before the second round of French presidential elections in which Emmanuel Macron won a convincing victory.
Today the market is waiting for the publication of April data on the American labor market. They are expected to be stronger than in March and the growth of nonfarm payrolls may amount to 194K. Preventive indicators generally confirm the outlooks. ADP Non-Farm Employment Change was slightly higher than outlook (177K), and the number of Initial and Continuous Jobless Claims in April decreased (from 246 to 243 and from 2,027 to 1,977 respectively). Therefore the results of the American labor market may be strong enough to lead the pair to considerable correction.
Support and resistance
Technically the price is in the zone of gathering of Fibonacci corrections (1.0980) and has met the upper border of the upward channel. Therefore the options of downward correction to the area of another gathering (1.0840) and the middle line of Bollinger Bands (1.0790) seem likely. In case the important level of 1.0980 is broken though, the price may continue to grow to 1.1090 (Fibo correction 61.8% for the medium term trend) and 1.1140.
Support levels: 1.0980, 1.1090, 1.1140.
Resistance levels: 1.0840, 1.0755, 1.0685.
In this situation short positions should be opened below 1.0950 with targets at 1.0840, 1.0790 and stop-loss at 1.0990.
If the price consolidates above 1.0980 long positions may be opened with targets at 1.1090, 1.1140 and stop-loss at 1.0960.
Latest posts by liteforex.com (see all)
- NZD/USD: FOMC Minutes pushed the pair upwards - May 25, 2017
- Alibaba Group Holding Limited (BABA/NYSE) - May 23, 2017
- USD/CAD: the fall to the lower border of the channel may continue - May 23, 2017