The Non-Farm Employment Change indicator was reported at 1371K, the
Unemployment Rate dropped from 10.2% to 8.4% in August, while the
Average Hourly Earnings rose by 0.4%, beating the 0.0% estimate.
The USD was somehow expected to appreciate versus its rivals after the
good economic figures. It remains to see how the USDX will react during
the day, a further growth followed by the breakout of 93.24 could
announce a broader upside movement and EUR/USD correction.
USDX tries to continue its rebound but is facing a tough resistance at
the minor downtrend line, Falling Wedges resistance. Still, the index
shows some positive signs after closing above the upside 50% Fibonacci
line.
Friday‘s false breakout with great separation above the minor
downtrend line signals that the sellers are still in control. Only a
jump and close above 93.24 Friday’s high will really confirm a short
term reversal.
You should be careful because another false breakout today followed by
a drop below 92.55 static support will announce a deeper drop.
EUR/USD stays within the minor ascending channel, so it maintains its
bullish outlook. The price has registered only two false breakdowns with
great separation below 1.18 psychological level signaling strong
bullish pressure around this downside obstacle.
Yet, the pair could still come back to pressure the 1.18 level, that‘s
why I’ve said that the next days could be crucial. A valid breakdown
from the up channel and below 1.18 could suggest selling, while another
bullish momentum followed by a valid breakout above the second warning
line (WL2) will bring a long opportunity.
A bearish reversal will be confirmed by a drop and close below 1.17
psychological level. Stochastic and RSI show a bearish divergence on the
Daily chart but we need another lower low, drop below 1.1781 Fridays
low to confirm a further drop in the short term.
The 250% Fibonacci line represents strong dynamic support. Today, the
greenback could take the lead again as the German Industrial Production
indicator has increased only by 1.2% in July, less versus 4.5% estimate.
