September 12, 2020 at 5:14 pm #134281
At the time of writing, EUR/USD is traded lower at 1.1905 versus 1.2012 yesterdays high. It has registered a false breakout with great separation above the near-term resistance levels, so we cannot exclude a temporary decline.To get more news about <b>WikiFX</b>, you can visit wikifx official website.
Still, a down reversal is far from being confirmed, yesterday‘s pin bar (reversal candle) could be invalidated by a strong bullish candle today. USD recovered after the ISM Manufacturing PMI indicator was released. August’s ISM Manufacturing index increased more than expected to 56.0 points signaling further expansion.
The US is to release the ADP Non-Farm Employment Change later today. The indicator is expected around 1250K jobs in August, versus 167K in July. Moreover, Factory Orders could rose by 6.0% and could support the USDs rebound.
EUR/USD failed to close above the second warning line (WL2), and above the confluence area formed at the intersection between 1.2000 level with the upside line of the up channel. A bearish closure today would announce a potential further drop towards 1.18 psychological level.
The pair remains trapped within the minor up channel. RSI indicates a bearish divergence according to the Daily chart, but only a valid breakdown from this channel and below 1.18 will suggest selling.
EUR/USD turned to the downside as the USDX has bounced back since yesterday. You should be careful because some poor data reported by the ADP Non-Farm Employment Change could ruin the bearish scenario.
This could be a crucial week for the USD, the Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings, and the ISM Non-Manufacturing PMI data will be decisive and will give us a clear direction.
A valid breakout above the second warning line (WL2) after the release of these high impact economic indicators will suggest buying as EUR/USD should resume its upside movement. On the other hand, a valid breakout below the channels downside line and below 1.18 could announce a strong corrective phase.
Technically, a drop below 1.17 level could validate a bearish reversal, while a breakout of 1.2 brings another long opportunity.
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