Today, when the news for the Non Farm Payrolls came out, the Dollar took off for major gains and never looked back. The number posted was that U.S. Economy only lost 11,000 jobs. This is big news because the number was supposed to be – 119k so that means that the estimate was 108,000 off. The price reacted suddenly and violently and we had almost a 200 pip move to the downside today. I will give a detailed trade idea at the bottom of this chart.
Look at the chart of today’s action:
1hr Chart *Note click on the chart to learn about our premium trading community.
When the news came out the price broke down through the trend line and then through the support level after that to move downward towards strong support of 1.4825. This bounce off of the strong support level could provide an excellent opportunity to go long. If the next one hour candle opens higher than the close that is a good buy signal. However I do not recommend placing a trade at the open on Sunday because the reaction from the open is not a good time for trading. Keep your eye on this pair for a couple of hours before placing a trade.
The first target for a long entry would be the 1.4900 area as that is a key resistance area.
Take a look at the 4 hour chart to see how strong this support area is and if this area would be broken that would be a bearish signal for the Euro and we could see a large move to the downside if this area is broken.
This level has been severely tested. There are seven bounces off of this level. A wise trader once told me that support and resistance levels are made to be broken so lets see what happens.
Keep updated this week with the news by reading Forex Crunch.
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