EURUSD has retreated from 1.1085 ahead of the US employment data. The following technical analysis is based on the Elliott wave theory.
September 06, 2019 | AtoZ Markets – The Euro-dollar currency pair dropped below 1.105 on Thursday shortly after it hit 1.1085 to mark its highest price in a week. The bullish correction is presented with another opportunity to move toward the major resistance levels after the multi-month sell-off dragged the currency pair to its lowest since May 2017.
Early in the London session, a series of Euro-zone data was released. The outcome was however mixed and had little impact on the price action. The Forex market is thus expected to be quiet ahead of the US Non-Farm payrolls (NFP) data that will be released later today.
The NFP and EURUSD analysis
After May’s addition of 164,000 new workers, the NFPs in August are expected to add 158,000 new workers. The average hourly earnings are expected to rise by 0.5% in August while the unemployment rate should remain at 3.7%. The USD is currently under pressure. If the NFP comes worse than expected (at least by 50,000), the USD is expected to tank against major currencies. EURUSD, on the other hand, should benefit and surge above the 1.11 handle. On the other hand, if the data comes out impressive (by 50,000 or more), the USD will resume its dominance and EURUSD will tank below the 1.1025-1.105 zone.
EURUSD analysis: important price levels
After it forced itself back into the 1.1025-1.105 zone, the bullish correction might continue to the 1.1165, 1.125 and 1.14 which are the next resistance levels. On the downside, a fast break below 1.1 might lead to a further decline below the 1.092 support level.
EURUSD Elliott wave analysis
From the Elliott wave perspective, we expected a 3-wave bullish correction toward 1.18-1.21 after the long term bearish impulse wave deemed to have completed with a minor shoot below the price level set for the end of the 5th wave.
As the chart above used in the last update shows, we expected a break above the wave (v) trendline to start wave B. As the new chart below shows, Price has not yet surged upside as much as expected.
The NFP coming later today will have a lot to say about the expected breakout. Otherwise, EURUSD will remain under the bearish territory and will most likely dip further.