Top Forex Trade Setups, Jan 7 – US ISM Manufacturing in Limelight
Arslan Butt • 2 min read
- The US dollar fell against the Euro, giving up all the winnings recorded after strong US labor market figures.
- The US job growth jumps, but the unemployment rate soared to 3.9%.
- The US ISM Non-Manufacturing PMI will be in focus during the New York session.
- EUR/USD & GBP/USD intraday trade setups today.
On Monday, the dollar slipped against peers, as traders put bearish lots due to growing expectations that the Federal Reserve would put its policy tightening on pause in 2019. Despite a stronger than expected US labor market report, investors are trading a sentiment that the US economy is losing momentum.
That weakness in the dollar is bringing us trade opportunities in the EUR/USD and GBP/USD today. Let’s take a look.
EUR/USD – Horizontal Resistance Breakout
The EUR/USD has broken above an intraday resistance area of $1.1415 and it’s likely to close 30- hour candle right above the resistance level. The pattern is now extending strong support to direct currency around $1.1415, The resistance prevails at $1.1480.
Potential Economic Events to Impact
ISM Non-Manufacturing PMI – The Institute for Supply Management is due to release services PMI figures at 15:00 (GMT) with a forecast of 59.6 vs. 60.7. Typically, the figure is released ahead of the NFP data but it’s late this month due to Christmas and New Year holidays.
Daily Technical Levels
Key Trading Level: 1.336
EUR/USD – Trade Plan
The idea is to stay bullish and trade around $1.1420 with a stop loss below $1.1390 and take profit at $1.1465 and $1.1480.
GBP/USD – Opportunity to Trade Sideways
On the 3- hour chart, the overbought GBP/USD has completed 78.6% Fibonacci retracement at $1.2750 and it’s consolidating right below it now. Looks like the pair is taking a bearish reversal, however, we can’t say much until today’s candle closes below $1.2815.
Technically, GBP/USD is likely to face a strong resistance near $1.2750 and $1.2810, which is extended by the double top pattern on the 3-hour chart.
Daily Technical Levels
Key Trading Level: 1.2695
GBP/USD – Trade Plan
Consider selling below $1.2810 with a stop loss above $1.2845 and take profit at $1.2710.