O.K.. Let us come back to This interesting Master Currency pair EURO/USD. I will try to condense my thought to cut down your reading time.
Fundamentals
Euros is in a crying need to instill investors' confidence to reduce the Issuing cost of their Bond issues which are essential to keep their survival intact. Recent "successful" bid of Spain's 3.5B Auction notes is with much higher cost,, and Spain is having min. 25B Bond redemption this month. Adding further fuel to the burning house, Moody may downgrade Spain next Month. Recent reports on the ECB to print more monies(LOANS) for Banks in Spain/Portugal/Italy/ including Greece Shows the Monetary Crisis in European Union are getting worst.
US , HER poor June ISM numbers is worrying. The housing poor sales further jerks Investor confidence which is aggravated by recent poor job Employment report.
The upcoming NFP is due today (Friday), with a possible 130k job contraction and a rise of Unmployment rate at 9.8%.
Comments:
Basically, the Currency structure(EURO/USD) has been remaining unchanged since the Last low at 1.1847. MID /Longer term views on Euros is still very Bearish.
Markets will be slowing down with Low Volatility near the Announcement of NFP.
Traders should refrain from committing new positions until a direction can be revealed. Last night's spectacular rise of Euro/Usd (350 pips within few hours) is everybody guess. A strong indication is pointing to a possible Intervention from ECB last night to rescue the Euros(Union), It is a desperate act but is a Must.
Technicals and Strategy
Looking at the Daily Chart, The Bull may lift the currency pair to the next resistance 1.2648(May,2010 High), which is also near the 50% Fibo Retr(From 1.3402 to 1.1847).
Breaking this 1.2648 level may see the pair sighting 1.3040 (23.6% Fibo Retr) , or near the top of Ichimoku Cloud resistance
Technicals show Near Term Bullishness with bullish divergence
On both H4, H1, chart, Technicals are pointing Strong Bullish Near term.
Trade with extra caution with tightened Stop Loss and Trailing Stop from now on till the announcement on upcoming NFP. (0830 EST;; -5 for GMT). Exit your trade one hour prior to the NFP release to avoid SPIKES which may be very undesirable.
Having said that, any retracement (quite unlikely near term) below 1.2200 should be a confirming signal for a downturn reversal for testing next low at 1.20000
Daily EURO/USD Chart
H4 EURO/USD chart
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