Softer data report and ECB dovish comments had EURUSD drifted to the bottom of its recent range. What next for the EURO? Let’s take a look at the Pre NFP EURUSD technical outlook.
07 April, AtoZForex –EURUSD has been quiet all week and perhaps waiting for the Non-Farm Payroll data report. It has been consolidating under the 1.07 figure. Having recovered from a short-lived Draghi-driven drop to a fresh post-Fed low under the 1.0650 handle. Within the week, ECB Mario Draghi delivered the most forceful defense of the current policy stance. This was in an effort to push back on recent rumors surrounding the risk of potential changes in the deposit rate. Mario Draghi underscored the need for confidence in inflation converging toward the 2% target. He suggested that there is currently ‘scant evidence of this’. The ECB released the Minutes of the March monetary policy meeting and according to the report, policymakers felt that removing their downward bias in March is premature as some viewed the baseline outlook as overly optimistic.
They, however, agreed that a discussion on normalization is warranted in the future. The summary of the whole thing is the ECB’s dovish persistence. The data reports coming out from the zone have been good. Smaller than anticipated rebound in German factory orders, however, confirmed a not so good data. Political risk should prove an added weight for the EUR going into next month’s French election.
Pre NFP EURUSD technical outlook; Daily analysis
From the daily technical perspective, the EURUSD is currently being held by a life support. A trendline connector between January and March low is the only hope EURUSD is holding on to. Moreso, the price is being capped by its 50-Day MA. A break of the said life support will have price fall towards the daily equality targets of 1.0500.
Pre NFP EURUSD technical outlook; Hourly analysis
The 4 hourly frame speaks a language in tandem with the daily frame. However, a slight difference observed is the Fractal analogy being mapped out by the current price action. This is shown with the red lines drawn in the chart above. The equality target of this hourly fractal is found around the 1.0522 region. Going into today’s US jobs report, chasing further weakness would not be advised. However, for the sharp fingers who got on earlier, 1.05 handle will be a good place for taking profit.
Our focus will be centered around the price action on the rising trendline. A convincing break will have 1.0520 support exposed.
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