U.S. Unemployment On Deck: EUR/USD Tags 1.2500

The USD has resumed its slide for 2018. Thus far in today’s forex session, the post-FED losses against the EUR, GBP, and CHF have been extended. It seems as if yesterday’s comments from FED Chair Yellen have been interpreted by the market as exceedingly dovish. Price action in the EUR/USD has been indicative of what we have seen over the past several months.

It is refreshing technical analysis is simple. As traders, many times we get carried away with indicators, levels, timeframes, correlations, etc. The bottom line for the EUR/USD is elementary: The long-term trend is up and market participants are slugging it out between 1.2500 and 1.2400.

EUR/USD Technicals

The technical event worthy of note for today’s action in the EUR/USD is price tagging 1.2500. With an intraday high of 1.2499, a firm test of the key psyche level has shown sellers to be present at topside resistance.

Here are several support and resistance levels to watch for the rest of the week:

• Resistance (1): Psyche Level, 1.2500
• Resistance (2): Swing High, 1.2537
• Support (1): Psyche Level, 1.2400
• Support (2): 20 Day EMA, 1.2264

Overview: It is tempting to play a breakout over 1.2500, but the presence of the Swing High may prompt the formation of a double-top. In addition, tomorrow’s release of U.S. Unemployment may stimulate a directional move to the bear from 1.2500.

For the last 7 sessions, the big round numbers have attracted participation. That is what we are seeing now — short position taking from the level of 1.2500. I will be on the sidelines until after Friday’s U.S. Unemployment report is released. At that point, we may have an intermediate-term view of where this market is heading.