EUR/USD Challenges 1.1200

The Greenback has been on a roll today, putting together a strong session across the majors. A blockbuster U.S. Non-Farms Payrolls report has been the primary catalyst driving the move. Following the robust NFP, projections for a ½ point July 31 FED rate cut have been shelved in favor of a “certain” ¼ point move. Subsequently, the price action facing the EUR/USD, USD/CAD, and GBP/USD has gone directional.

EUR/USD Rates Fall To 1.1200

In a Live Market Update from Thursday, I broke down the daily technical outlook facing the EUR/USD and the importance of a key 62% Fibonacci support level (1.1270). If you missed the update, check it out here. 

It certainly looks as though the muted conditions of yesterday’s holiday session were a precursor of today’s move. The EUR/USD was in the midst of a tight three-day consolidation phase ― this morning’s NFP numbers brought participation to the market in droves, facilitating a hard bearish break.

Bottom Line: Going into next week’s trade, the key number to watch in this market is the Swing Low at 1.1181. If rates continue to drive south, this area provides a solid entry to the long. Until elected, I will have buy orders queued up in the EUR/USD from 1.1189. With an initial stop at 1.1174, this trade produces 30 pips on a 1:2 risk vs reward management plan.

Next week brings the semiannual Congressional testimony of FED Chair Jerome Powell. This event takes several days and will largely shape views toward the USD for the intermediate-term. Be sure to stay tuned for complete coverage of this key entry on the FED’s yearly calendar.

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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