Richard Perry
Independent Analyst
EUR/USD
A succession of negative candles has dragged EUR/USD back to now breach the key support around $1.0980. Although yesterday’s close was bang on the support, the market is now consistently breaching the floor on an intraday basis. This move has taken the pair to a four month low and opens a test of the crucial support at $1.0875. The bottom of the downtrend comes in at $1.0940 today which is also a minor support level from October. The concern is that in bearish configuration, momentum indicators also have additional downside potential, with the RSI around 35 Stochastics still tracking lower and MACD lines also deteriorating. Non-farm Payrolls could be a source of early consolidation today, however, the price action this week would suggest that the market is looking for dollar strength to continue. As such, intraday gains on EUR/USD should be seen as a chance to sell. The hourly chart shows resistance $1.0990/$1.1015 for payrolls, whilst any failed rally under $1.1035 is another opportunity.
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