Non-Farm Payrolls Publication Looks to Push EUR/USD Out Of the Range
March 5th, 2010 Posted in Technical Analysis
After 3 weeks on which the EUR/USD pair was traded within a very restricted range of about 300 pips, a major data release from the U.S. economy threatens to end the range-trading. The market has been extremely calm over the past 18 hours, and it seems that everyone waits for the end result of the Non-Farm Employment Change report before making their next move. Here is a technical perspective that might help you reach a better decision regarding your trading.
• The chart below is the EUR/USD 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• The chart shows consecutive “ups and downs” for the past 3 weeks, on which the EUR/USD pair was traded between the 1.3430 and the 1.3735 levels.
• In particular, it can be noted that all the last 4 candles are all dojis, reflecting the high tension that exists in the market at the moment, due to the expected Non-Farm Payrolls release.
• It can also be noted that the two major technical indicators are providing contradicting forecasts. A bullish cross of the Slow Stochastic suggests that the news release will create a bullish tend, whereas a bearish cross of the MACD indicates the opposite.
• Traders should take under consideration that all forecasts are worthless as soon as the real result is announced. Nevertheless, considering the current recent momentum of the Dollar, it seems that the end result will likely boost the Dollar and take the EUR/USD pair below the 1.3430 level.
• However, a very surprising release could reverse the trend, with enough potential to reach the higher level of the range.
