This is a break down analysis of EURUSD ahead of the Nonfarm Payrolls.
Fundamental Analysis:
- The U.S. Nonfarm Payrolls for January have a forecast of 160K, higher than the 145K number of the previous month.
- Based on the last 12 Nonfarm Payrolls reports, EURUSD has a 100% probability to go higher on the 4H chart if the Actual number is lower than the Forecast. Similarly on the 12H timeframe if the Actual reading is higher (>) that the Forecast there is a 66.7% chance to go lower, while for the opposite reading (Actual < Forecast) there is a 80% to go higher. The projection on a 2 day timeframe is also 66.7% probability to go lower if the Actual < Forecast.
- Also keep in mind that EURUSD is in the aftermath of the effects by the higher than expected German Trade Balance. This gives a 66.7% probability for EURUSD to rise on the short term (4H and 12H).
Technical Analysis:
- The pattern is still a Channel Down since the December 31, 2019 High.
- The Resistance levels are at 1.11750 and 1.12400 while the Support at 1.09800 and 1.08800.
- Death Cross (MA50 crossing below the MA200) formed on the 4H chart.
- The RSI is bearish on the September Support.
The above mix indicates that EURUSD is bearish both fundamentally and technically on the long term and as the 1.09800 Support 1 broke, targets the 1.08800 Support 2. On the short term though, with the German data supporting an up move and if the U.S. Nonfarm Payrolls report lower than expected numbers, we may see a brief spike, which would make an ideal Lower High on the Channel Down technically and can be seen as the longer term sell opportunity. If however the 1.094 level breaks first, then the Channel Down is invalidated and we will most likely see the 1.08800 Support 2 sooner than expected.
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Fundamental Analysis:
- The U.S. Nonfarm Payrolls for January have a forecast of 160K, higher than the 145K number of the previous month.
- Based on the last 12 Nonfarm Payrolls reports, EURUSD has a 100% probability to go higher on the 4H chart if the Actual number is lower than the Forecast. Similarly on the 12H timeframe if the Actual reading is higher (>) that the Forecast there is a 66.7% chance to go lower, while for the opposite reading (Actual < Forecast) there is a 80% to go higher. The projection on a 2 day timeframe is also 66.7% probability to go lower if the Actual < Forecast.
- Also keep in mind that EURUSD is in the aftermath of the effects by the higher than expected German Trade Balance. This gives a 66.7% probability for EURUSD to rise on the short term (4H and 12H).
Technical Analysis:
- The pattern is still a Channel Down since the December 31, 2019 High.
- The Resistance levels are at 1.11750 and 1.12400 while the Support at 1.09800 and 1.08800.
- Death Cross (MA50 crossing below the MA200) formed on the 4H chart.
- The RSI is bearish on the September Support.
The above mix indicates that EURUSD is bearish both fundamentally and technically on the long term and as the 1.09800 Support 1 broke, targets the 1.08800 Support 2. On the short term though, with the German data supporting an up move and if the U.S. Nonfarm Payrolls report lower than expected numbers, we may see a brief spike, which would make an ideal Lower High on the Channel Down technically and can be seen as the longer term sell opportunity. If however the 1.094 level breaks first, then the Channel Down is invalidated and we will most likely see the 1.08800 Support 2 sooner than expected.
If you like this idea give us a like, follow and share your thoughts in the comments section below. Remember to stay tuned for future technical analysis , news, updates, and more from PrimeXBT!