I have been mostly flat this week, taking just a few short scalps on euro and sterling over the past two days with the opening range for the week, month, and year of particular interest as we head into tomorrow’s highly anticipated Non-Farm Payrolls report. Here are my preferred setups.
EURUSD- Yesterday marked a fourth failed attempt to mount the May high at 1.3283 with the break below the 61.8% Fibonacci extension taken from the November and December lows at 1.3165 warranting action on the short side of the pair. Limits were triggered at 1.3145 and 1.31-handle before the pair found at the 38.2% long-term Fibonacci extension taken from the July and November lows at 1.3090. A break here targets 1.3060 and the 1.30 handle. I’m flat here heading into NFPs with the print likely to offer conviction with a reaction off this mark. Note that channel support dating back to the November lows rests just lower with a break below this threshold likely to trigger a deeper correction into the 1.30-handle.
GBPUSD-The pound broke below key daily support noted this morning at 1.6140 on the back of the release of the latest FOMC minutes where, “almost all members saw the potential QE cost as increasing.” The release gave lift to the greenback which continues to outperform all its major counterparts today. Looking to target channel support at the 1.61-handle backed by the S1 monthly pivot at 1.6070. Resistance now stands at 1.62.
For updates on these setups and more follow me on Twitter @MBForex
---written by Michael Boutros, Currency Strategist with DailyFX
New To Forex? Watch this Video