No rate hike with limited EURUSD hike! NFP ahead

After 8 weeks of ping-pong like EURUSD market movement between 1.05 and 1.10, the pair has finally managed to break and close the weekly market above the 1.10 psychological resistance level. Fundamental developments played a key role for the previously impossible bullish developments as the US data keeps surprising investors negatively. On top of the negative US fundamental statistics the FOMC meeting results also revealed that the FED committee is also concerned about the disappointing data, especially the employment figures and therefore they are not in a rush to hike the interest rates.

Technical indications:

• The pair broke above the 1.1040 level which was right on the 61.8% Fibonacci retracement level and have reached to 88% Fibonacci retracement level (471 pips movement in a week)

• The pair found its resistance at 1.1280 zone which is supported by 88% custom Fibonacci retracement level, falling trend line from 12 October 2014 as well as the first major resistance zone of February 2015.

• Technical indicators indicate possible continuation of the bullish movement but fundamentals are expected to be choppy this week especially due to the upcoming NFP data

On weekly timeframe bulls are weighing in favor of Euro based on the supportive speech by the ECB president Mario Draghi and disappointing US fundamentals, majorly the GBP figures. MACD signal line has gone below the MACD bars, and RSI is heading towards 50 level.

Chart 1 – EURUSD – Weekly Timeframe, Bullish Euro

Moving on to daily timeframe, strong bullish momentum becomes clearly visible, excluding Friday’s daily candlestick which is a potential reversal candlestick formation.

Looking into our indicators and oscillators, MACD has broken above its zero line moving onto positive zone, forming higher bars above the signal line, RSI rests right on the 70 zone, following an upward trend line and 5 MA is acting as a dynamic resistance level, 50 SMA still looking down and turning flat. Meanwhile, 200 day SMA is sloping downwards which is an indication that the recent Bull Run is likely to be just a temporary hick-up in the market.

Chart 2 – EURUSD – Daily Time-frame, Strong bullish momentum capped by the falling trend-line

From hourly time-frame, Euro follows the bullish regression channel, as both 50 and 200 MAs are sloping upwards. It would seem, that the lower the time-frame gates, the stronger the bullish pressure becomes. After bouncing off the 88% custom Fibonacci retracement zone at 1.1280 zone, 50 period SMA once again appears to act as a dynamic support zone as the market closed right on on it.

However, despite the strong bullish momentum on smaller time frame 1.13 zone appears to be a rather strong resistance level for the bulls to break above. Unless we get an extremely negative NFP figures from the US 1.13 zone is expected to stay strong and the pair to move towards previous week’s Pivot line at 1.11 and then to 61.8% Fibonacci retracement zone at 1.104. May we have a daily candle close below the 50 day SMA bears could be expected to take control of the pair once again.

Alternatively, may we have supportive NFP figures and overall less disappointment from the US, bulls could take control of the pair pushing the price above 1.13 zone. In such scenario 1.1390 zone would become as the following target at 100% Fibonacci retracement zone.

Chart 3 – EURUSD – H1 Timeframe, Bullish run

Weekly Pivot Point: 1.1100

Weekly resistance levels: 1.1290 (R1), 1.1390 (R2), and 1.1500 (R3)

Weekly support levels: 1.1040 (S1), 1.0930 (S2) and 1.0825 (S3)