EURUSD Analysis: Mr. Euro could be losing its groove, people! With the NFP report and ECB’s Draghi’s speech coming up, EURUSD dropped inside the Ichimoku cloud on a bearish momentum. What could be next for the pair? Let’s take a look at 3 key points of IDDA technique to find out; USDCAD technical, fundamental and market sentiment analysis.
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1- EURUSD Analysis: Technicals
The EUR/USD pair continued its bearish momentum on Wednesday , confirming a break below the neckline of a double-top chart pattern, and entering inside the daily Ichimoku cloud.
However, we don’t have any Ichimoku confirmations as of yet. The Kijun and Tenkan lines are flat. And the Chiko span remains inside the previous cloud at the time of writing.
The next support level is at 1.1749 followed by 1.1588.
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This brings us to the second point of the IDDA; Fundamental analysis.
2- EURUSD Fundamental Analysis
On the economic calendar today we have the Swiss Unemployment Rate (NOV) at 6:45 AM GMT.
This is followed by German Industrial Production s.a. (MoM) (OCT) at 7 AM.
Euro-Zone Government Expenditure (QoQ) (3Q) will be up next at 10 AM , expected to drop to 0.3% from the previous 0.5%.
During the New York session, the US weekly Initial Jobless Claims will be out at1:30 pm GMT .
Next, at 4 PM , we have yet another event that could shake the EUR crosses. ECB’s Mario Draghi holds a conference in Frankfurt. A more hawkish than expected tone could support the EUR/USD pair, while any signs of uncertainty could push it towards our key support levels.
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The main event of the day is considered to be the US Non-Farm Payrolls report at 1:30 PM GMT.
For the month of November, most economists forecast that around 210K non-farm jobs were created, so economists think that jobs growth was still relatively solid but slower compared October.
In any case, just remember that a better-than-expected reading of non-farm payrolls triggers a quick USD rally as a knee-jerk reaction.This would mean for the EUR/USD could temporarily drop.
Then the market could turn into profit-taking mode.
3- EURUSD Market Sentiment Analysis
The third point of IDDA looks at market sentiment. On Wednesday, retail trader data shows 40.2% of traders are net-long the EUR/USD pair. The number of traders net-long is 11.1% higher than yesterday and 9.7% higher from last week, while the number of traders net-short is 3.2% lower than yesterday and 1.6% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse lower despite the fact traders remain net-short.
At the moment we have rather mixed signals from the main three points of the IDDA. Join our investing group to get the latest trading signals, stop-loss, take-profit and other limit order ideas. Our comprehensive signals will help you create a unique strategy for you, according to your risk tolerance.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc.