Intraday Market Analysis: Euro Dollar Ahead of the NFP

[indeed-social-media sm_list=’fb,tw,li,goo,xg’ sm_template=’ism_template_3′ sm_list_align=’horizontal’ sm_display_counts=’false’ sm_display_full_name=’true’ sm_disable_mobile=1 ]

EURUSD Intraday Strategy

The Euro suffered from heavy losses on Thursday as Mario Draghi lowered the European Central Bank (ECB) projections and hinted the Quantitative Easing (QE) program may be raised. Our intraday strategy for EURUSD may still be relevant after the Non-Farm Payrolls (NFP) but we believe the reaction is likely to trigger an entry via the 4hr Chart.

EURUSD 4hr Chart

Please click on the chart to enlarge:

EURUSD 4hr Chart 04/09/15

EURUSD 4hr Chart 04/09/15

As you may note EURUSD is trading inside a bearish channel. The 200 Moving Average (MA, in orange) was able to support the price at the initial test. Unlike our GBPCHF strategy we are uncertain long position at current levels may be a wise choice even if another re-test is made to the 200MA or the support level of the bearish channel. The best entry would be a re-test of the upper resistance level of the channel that is also support by a secondary resistance (in blue). All that is required is a re-test of the upper resistance and failure to break above may lead to moderate losses towards the lower support level of the channel. A firm break above the resistance is likely to lead to further gains towards 1.1360. The most optimal scenario however would be a successful re-test without a breakout.

Should EURUSD break outside the channel by violating the support level further losses may be seen towards 1.1017. Although this is less relevant to the strategy we are reminding that the Fed is due to announce its monetary policy this month where we believe a rate hike is out of the question. The Greek elections will be the centre of attention for September 2015.

09/09/15 UPDATE: EURUSD re-tested the upper resistance and was sold off by the market bears.

Please click on the chart to enlarge:

EURUSD 4hr Chart 09/09/15

EURUSD 4hr Chart 09/09/15

Despite the bearish retracement Euro Dollar is reluctant to post moderate losses at the time of this writing.