As observed, this pair was ranging yesterday with it moving a paltry 72 pips when compared to over 120 pips it moved the previous day. This was perhaps because of the mixed news which trickled in from the US with the ADP Non-Farm employment registering 156K which was a significant drop when compared to 194K employment which was recorded last month. Likewise, there was a slight rise in the quarterly preliminary nonfarm productivity to -1.1% compared to December’s -2.2% with labor costs over the same period increasing to 4.1% from 3.3%. Strong gains in the US came in the evening when the ISM Non-Manufacturing PMI was released and it came at 55.7 from last month’s 54.5 meaning that there was some expansion in the economy a fact which was further reflected by the increase in factory orders to 1.1% against March’s -1.7%. These are some of the tidbits which will provide hints on tomorrow’s NFP when volatility is expected.
With this news, now let’s see what happened on the charts:
Daily Chart Analysis
Technically speaking, we are at an important level because as expected, the 5 month resistance line proved too difficult to be breached and price bounced off from the area with the lowest price level coming in at around 0.685 during the New York Session right after the release of Yesterday’s ISM Non Manufacturing PMI. We also saw that even though there was some breach in lower the 4 HR support trend line, some reversal signals were beginning to form with price appearing to bounce back from the 3 month Daily support trend line.
From our fundamentals, there were some news from the US and even though we expected price to break below the strong resistance zones which have been marked out clearly in the chart, price action didn’t actually move through them. We shall be looking at today’s Unemployment claims which is forecasted at 261K from last week’s 257K and this will be released at 1230 GMT but before that, lets observe the Yearly Challenger’s Job cut set to be released at 1130 GMT. Last year it was at 31.7%
4HR Chart Analysis
In this chart, there seems to be a strong reversal developing and with OBV showing a reduction in volumes which is causing the stochastics to turn from the oversold regions. What is of important however is the level in which this buy signal is developing from and as observed, it turned off from the support zone which was significant mid last week and from which price reversed in the last trading week of March. It is also a very strong reversal bar after the formation of the morning star if the last two bars are condensed together as shown in the chart.
15 Min Chart Analysis
From the charts, there is nothing but small movements shifting north, a move which begun in the New York Session and is continuing in the Asian Session. Right now, price action has corrected to 50% of the Fibonacci level with the stochastics at the oversold region even though OBV is showing an increasing volume. We shall be looking to add to our long positions from this level only with the right indicator combination.
Otherwise, have a pipful day.