Yesterday's trading on the main currency pair of the Forex market was held in a sluggish mode and a fairly narrow price range. It seems that investors have not yet fully digested Friday's data on the US labor market and did not know whether to rejoice at the fact that the number of jobs created in the non-agricultural sectors of the US economy significantly exceeded the forecast value, or to be upset by weaker-than-expected data on unemployment and the growth of average hourly wages. In addition, yesterday, there were no significant fundamental indicators from the eurozone and the United States. Thus, it was quite problematic to find a driver for a good incited movement, taking into account the indicated factors. If you look at today's economic calendar, the attention of market participants may be attracted by data on retail sales in the eurozone, as well as the index of business sentiment from the ZEW institute for the eurozone and Germany. After lunch, the US will receive data on the index of business activity for the services sector from Markit, as well as a report on the index of business activity in the services sector from the Institute for Supply Management (ISM). More detailed information on these and other events can be found directly in the economic calendar.
A small candle of the Doji variety with a barely noticeable bullish body — that's all that Monday's trading left behind. Such a swing on the first trading day of a new week is a fairly frequent phenomenon, and this Monday was no exception. If we focus on the daily timeframe, then euro bulls still need to raise the quote above the selected and very strong resistance zone near 1.1975. However, before that, you need to pass the red Tenkan line of the Ichimoku indicator on the rise, which is located at 1.1891, and then the orange 200-exponential average, located at 1.1933. Players on the downside of the exchange rate need to transfer trading below the important significant and strong level of 1.1800 at all costs.
After this task is completed, it is possible to move the quote to lower prices, namely to 1.1745, 1.1700, 1.1670, where one of the key support levels passes. At the moment of writing the article, the pair is strengthening. However, will the bulls be able to continue the upward movement? We will get the answer to this question during today's trading, the results of which we will summarize in tomorrow's review. I would like to add that the technical picture, namely Friday's bullish candle with a particularly long lower shadow, still leaves good chances for the price to move in the north direction. However, if the growth takes place, it will still be corrective. Let me remind you that there is a lot of strong resistance at the top, which will be very difficult for euro bulls to overcome.
I decided to skip the four-hour timeframe for now and analyze the hourly chart, according to which the points for opening positions are determined. We see that during today's rise, the pair has already passed the black 89 exponentials up and has begun to break through the orange 200 EMA. I can recommend the following plan today. In the case of passing up the 200 EMA (1.1891), which is breaking through right now, and fixing over 1.1900 with three consecutive hourly candles, you can try buying on a short-term pullback to the price zone of 1.1905-1.1870. If the breakdown of 200 EMA turns out to be false and a candle with a long upper shadow appears and the closing price is below 200 EMA, this will be a signal to open short positions. With any type of positioning, I recommend limiting yourself to 30-40 points of profit, after which you close transactions and exit the market. Still, the current situation does not give an unambiguous idea of the price direction of the main currency pair.
*Prezentowana analiza rynku ma charakter informacyjny i nie jest przewodnikiem po transakcji.
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