Hello Traders,

On Friday, this pair managed to break below the
channel closing in at 0.669, the lowest price since March when it closed at the
0.6850 an aftermath of a USD rally which came in at the NY session when the quarterly
Preliminary GDP came in as expected at 0.8% against last’s quarter’s 0.5%. We
can say this is slightly good news considering that the job market is really
doing well and with most economists concluding that the US is approaching its
full employment at 5% unemployment rate. Good news for USD is expected to
continue though with Atlanta Fed’s painting a fairly tale 2.9% GDP growth for the
next quarter.

Now let’s see what happened on the charts:

Daily
Chart Analysis

First, today is the US Bank holiday so don’t expect
much on volatility and given that the critical support line which was broken on
Friday, our shorts have been validated. We shall continue to follow the weekly
chart as our general trend signal-it is bearish-as our guide for this pair. The
OBV and Momentum don’t give a conclusive signal and our probable next zone of support
will be at the 200 day moving average and March lows of 0.6550 which is a
region of confluence with the 161.8 Fibonacci Level.

Fundamentally, we should expect major volatility
from Wednesday all through to Friday when the NFP will cap the week. What is
interesting will the Unemployment rate which is forecasted at 4.9%, employment
change will also be at 160K and an inflator hint being the Average Hourly Earnings
which is expected to reduce to 0.2% from 0.3%. Statistically, this will be
mixed news considering how the labor market has recorded improvement with the
average Unemployment Claim Benefits reducing in the past couple of weeks-it is
projected at 271K from last week’s 268K. Watch out for this release on Thursday
1230 GMT

4HR Chart Analysis

There is formation of a strong buy signal in the
oversold region of the stochastics in this time frame. There is volume addition
and a follow through of two bullish candle sticks bouncing off from the lower
BB. If you trading this time frame then look to buy with your target being the
resistance trend line in this descending channel.

15 Minute Chart Analysis

Price action is bouncing off the 100 Fibonacci
level since the start of the Asian session. If anything, use the 1 hour chart
for general trend in this time frame-looking into the 1:4 ratio and buy from
all lows with a 1:2 risk reward ratio considering the narrow daily pip range of
this pair.

General Outlook: Bullish

Have a pipful day.

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