EURUSD Forex Forecast – Uptrend Correction Setup

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EURUSD Forex Forecast - Uptrend Correction Setup

EURUSD recently made a strong upside breakout from the 1.1400 major psychological resistance then zoomed up to the 1.1600 handle. From there, price made a pullback and could retreat until that broken resistance area.

Using the Fib tool on the latest swing high and low shows that the 50% retracement level lines up with the area of interest, which might now hold as support. The 100 SMA is above the longer-term 200 SMA so the uptrend is likely to carry on.

These moving averages are closer to the 61.8% Fibonacci retracement level, which could be the line in the sand for any correction play. Stochastic is on the move down so EURUSD could follow suit while RSI is heading south and indicating a return in selling pressure as well.

If any of the Fib levels hold as support, EURUSD could resume its climb to the previous highs at 1.1600 or higher. A break below the 61.8% level, on the other hand, could spur a longer-term selloff.

Event risks for today include the release of the ADP non-farm employment change figure, which could indicate a 205K gain in hiring. This is slightly higher than the previous 200K increase, which could spell positive prospects for the upcoming NFP release on Friday.

Also lined up today is the ISM non-manufacturing PMI and of particular importance will be the jobs component. As for the euro zone, the final services PMI readings are lined up, along with the region’s retail sales figure and the Spanish unemployment change report.

European banks will be closed for the holiday tomorrow so profit-taking could take place today. Additional volatility is expected throughout the week on lower market liquidity.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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