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EUR/USD Forecast December 4, 2015, Technical Analysis

Daily Forex Reports | by FX Empire | Friday, 04 December 2015 05:49 UTC

The EUR/USD pair initially fell during the day on Thursday, but then rocketed to the upside to crash into the bottom of the uptrend line that had previously made the ascending triangle. This was in reaction to the European Central Bank doing much less in the way of stimulus than anticipated. However, this is Nonfarm Payroll Friday, so if we get a very strong jobs number, we may see this move turn around. With that, if we can see some type of resistive candle we would be sellers. It’s a bit difficult to start buying at this point though, because quite frankly we would be chasing the trade at this point and that is an excellent way to start losing money. Quite frankly, you would’ve had to get involved to the upside almost immediately, something that’s very difficult to do.

 

We also see quite a bit of a resistance above, extending all the way to the 1.11 handle. Because of this, and the fact that we have the 1.10 level above could be resistive based upon the fact that it is a large, round, psychologically significant number. It was also the scene of significant support previously as well, and that means that the market should now see resistance there based upon basic technical analysis.

 

However, we are cognizant of the fact that this candle is so strong. Because of this, we believe that the trading session today will be one of the most important trading sessions for the US dollar this year, and believe that it is probably going to decide the next longer-term move. A stronger than anticipated jobs number would lead to the Federal Reserve having to not only raise interest rates, but possibly enter a rate hiking cycle. If that’s the case, that could continue to punish this pair and send it much lower cause even though the ECB did less than anticipated, the fact of the matter is they did in fact increase stimulus. Expect volatility, be very cautious about any trades, but ultimately we believe by the end of the day today we could have a much clearer picture of the outlook.

EUR/USD Forecast December 4, 2015, Technical Analysis

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