EUR/USD climbs to pivotal area ahead of US data
Fawad Razaqzada September 5, 2019 11:26 AM
The EUR/USD showed bullish follow-through on Wednesday after it had created a reversal stick on the daily the day before
The EUR/USD showed bullish follow-through on Wednesday after it had created a reversal stick on the daily the day before in the form of a bullish hammer. That was in response to a very disappointing US manufacturing PMI report, which raised some speculation about a potential 50 basis-point rate cut from the Fed in their meeting later this month. However, unless we see further deterioration in incoming data from now on until the conclusion of the FOMC meeting on 18th September, it is very likely the Fed will cut rates by another 25 basis points instead of 50. Thus, today’s private sector payrolls report from ADP and the ISM non-manufacturing PMI should be very important in this regard, ahead of even more important official non-farm payrolls report on Friday. The EUR/USD bulls will want to see weaker numbers and the bears would prefer stronger figures. At 1.1050-1.1075, the EUR/USD was testing a pivotal area at the time of writing. Previously support, this area may turn into resistance. However, the aforementioned reversal pattern means there is an increased risk for further upside follow-through as trapped bears continue to abandon their positions. So, today’s close shall be important from a technical point of view: below 1.1050 would be bearish, above 1.1075 bullish.
Source: eSignal and City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.