The US Employment Report will be released at 8:30 AM ET.  A graphical preview (PPT slides) can be found by clicking on this link http://blog.fxdd.com/2014/02/06/infographs-looking-at-the-january-employment-report/   Note that there are a number of wild cards in this report including the weather effect, the revision to last month because of the weather and also the benchmark revisions for 2013. So understand that the risk from the interpretation of the day is greater than normal.

When risk is great, it is often suggested to trade after the dust has settled and follow the technical clues and targets from the directional bias the market takes. Trading before is a gamble.

So where are the technical levels to eyr.  From a technical perspective, the EURUSD has moved lower today and is settling above and below the 200 hour MA at the 1.3565 level.  The 38.2% of the move down from the years high is not far from that level (see chart above) at 1.3576. This is the area (1.3565-76) that will define bullish or bearish. Move above bullish/ move below bearish.  From there is a matter of following the technical targets in the direction of the bias. IF a level is broken, target the next and so on. If there is a reversal back through a broken  technical level, a red flag goes up.  If the price hits a key target and stalls, it could signal profit takers are entering.

Anyway on the topside, I see the following levels to target

  1. The close from yesterday at 1.3589.  Get above, stay above.
  2. and 3. 1.36013/07.  100 day MA at the 1.36013 area and the 1.36074 is the 50% of the move down from the 2014 high to the years low.  This area makes another key area to get above and stay above.  This area is more important than others I feel

4. 1.3618. High from yesterday
5.  1.3638. 61.8% retracement level
6.  1.3664.  Topside trend line on the daily chart (see below).  A move above this level opens up the upside for 1.3698 (high from January 14th) and then 1.3738 (high from January 24th)

On the downside:

1.  1.3534. 100 hour MA
2 and 3.  1.3515/1.3507. Lows form January 20 and 21st
4.  1.3492.  Low  from Feb 3rd
5.  1.3476.  Low for the year
6.  1.3409. Trend line from daily chart (see chart below)
7.  1.3398.  Low from November 21st (see chart below)
Once again, risk is increased through the number. Watch the targets for clues.  Good fortune with your trading.


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