The EURUSD has gained considerable ground this week. The pair’s ascent is even more impressive when you consider that just two weeks ago sellers had closed the October 14th session below wedge support near 1.1000.
However, we all know that the real test is the upcoming US non-farm payroll report. It’s no secret that the NFP figure can have an enormous impact on the US dollar and thus creates a surge in volatility for a pair like the EURUSD.
And while I never trade the news and rarely enter a position before the weekend, I do like to watch how a market responds to critical levels in the face of uncertainty.
I mentioned the resistance area that starts with 1.1122 on Tuesday, and sure enough, the last two sessions have stalled at 1.1122 and 1.1125 respectively.
A move above this level would likely encounter additional sellers near the trend line that extends from the current 2016 high.
As for support, the lower boundary of the wedge pattern that extends from the March 10th ECB low would be the first target. And just 70 pips below that is the July low at 1.0950.
I do want to stress that it’s never a good idea to trade in front of a market-mover like NFP due to the unfavorable market conditions, but it never hurts to know your levels in advance. That way you know why the market moved the way it did instead of making assumptions.
So when 8:30 am EST rolls around just twelve hours from now, here are the key levels I’ll be watching:
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