EUR/USD Seeing Heavy Action At 1.1400
After a relatively strong European session, the EUR/USD has given back gains and returned to the 1.1400 level. Fundamentals are mostly to blame for the retracement. A solid U.S. Non-Farms Payroll report is being credited with the move, with a majority of the bearish action occurring during the U.S. session.
In a live market update from yesterday, I broke down the technical outlook for the EUR/USD. Things went as expected through the European session, with a bullish break to near 1.1500. Since the NFP report, all bets are off as rates are crashing beneath 1.1375.
EUR/USD Technicals
The whipsaw action of today’s forex session has been a challenge to trade. While the early bullish sentiment in the EUR/USD was somewhat predictable following Thursday’s positive close, the subsequent reversal was not. Most analysts and traders expected strong U.S. Non-Farm Payrolls ― the EUR/USD is acting like this is a complete surprise.
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There are two numbers on my radar for the Monday session:
- Resistance(1): 38% Current Wave Retracement, 1.1396
- Support(1): Spike Low, 1.1301
Overview: Today’s U.S. Non-Farm Payrolls coming in at 250,000 for October pretty much seals the deal on a December rate hike from the FED. The markets realize this, as illustrated by the CME FEDWatch Index jumping to a 72.1% chance of a December rate hike, up 3% in one day.
Forex players are echoing this idea, driving EUR/USD values down in concert with the long-term trend. Until we see a sustained rally above the 1.1500 level, one has to maintain an intermediate-term bearish bias.
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