EUR/USD – Rate Cut and NFP Later today

Posted on 04. Nov, 2011 by Jakob in Daily Outlook, Forex Signals, How To, Random Noise

If you followed the idea on EUR/USD posted here on the latest post, you should have been able to lock-in somewhere around 100 – 140 pips as the price action of EUR/USD on the day of FOMC played out well in accordance with technical key levels. Yesterday however, I tried to short EUR/USD, and in spite of the fundamentals released yesterday, the pair continued to rally throughout the end of the US session so we took a hit on that one.

Now let’s take a closer look at today’s upcoming session. EUR/USD currently trades around the 1.3810 level. First of all, keep in mind that we do have NFP coming out later today with an expected release of 97K compared to 103K previous release. Yesterday ECB decided to lower the Minimum Bid Rate from 1.5% to 1.25%. There are a bunch of other important fundamental aspects giving us an ambiguous state in the currency market.

Trading Forex – Technical Perspective

From a technical point of view, things do not look a whole lot better for now. On the 4-Hour chart we are now trading above the 10 and 21 EMA, although without a cross of the two EMAs. We are also trading above the key level mentioned in last post (Read; 1.3800). There is not a very clear level of near term resistance for now, and once NFP hits the wire, everything could be turned upside down.

Unfortunately I would have to say that for now, the pair looks mostly biased for further upside, which conflicting with my bias. I would prefer to look for a short opportunity, but based on technicals, I don’t see a clear spot for a possible entry.

Trading Forex – Price Action

From a price action perspective, I am once again indecisive. The pair is currently making higher highs and higher lows on the 4-hour chart, once again indicative of possible further upside. However, Keep in mind that pair still in the about to form this inverse flag formation which I also highlighted in the previous post, once indicates possible downside.

Trading Forex – Ideas

My best idea for now is to stay out and wait for NFP to hit the wire and then take it from there. There are too many conflicting aspects, in order for me to take a trade. Based on what we have seen so far, it does look like further upside for now, but this is not a trade I am ready to take. You could look for a possible entry around the 1.38 level but again, I would prefer to stay out. I will wait for NFP to come out and then see if we have anything setting up.

Related posts:

1. EUR/USD – 1.4960 Today?
2. Trading Forex – EUR/USD Before FOMC
3. Trading Forex – EUR/USD – Upcoming Week
4. ECB Rate Hike – As Expected
5. Trading Forex – Perfect Trade but Still in Range

Tags: Forex Signals, forex trading, Trading Forex