EUR/USD ANALYSIS

• Euro area economic situation stays weak but EUR bulls capitalize on US data.
• NFP and US ISM services PMI in focus tomorrow.
• EUR/USD stays within developing rising wedge.

EURO FUNDAMENTAL BACKDROP

US labor data through the jobless claims print showed an increase relative to forecasts that could signal the beginning of an unwinding jobs market. Although there is minimal correlation between this report and the Non-Farm Payroll (NFP) figure tomorrow, coupled with the miss on ADP employment change yesterday, markets may be expectant of a weaker overall NFP release tomorrow.

Source: Refinitiv

TECHNICAL ANALYSIS

EUR/USD DAILY CHART

Chart prepared by Warren Venketas, IG

The daily EUR/USD daily chart remains within the pattern rising wedge (black) after testing wedge support yesterday. The lower long wick close yesterday naturally saw prices push higher today but this may be brief considering the weak economic data in the Euro area. Short-term directional bias hinges on tomorrow’s US NFP and ISM services PMI.

Resistance levels:

• 1.0800
• 1.0700
• Wedge resistance

Support levels:

• 1.0635/50-day MA
• 1.0600
• Wedge support
• 1.0500
• 1.0443
• 1.0300

IG CLIENT SENTIMENT DATA: BULLISH

IGCS shows retail traders are currently neither NET LONG on EUR/USD, with 55% of traders currently holding long positions (as of this writing).

https://www.dailyfx.com/news/forex-eur-usd-price-forecast-euro-progresses-as-markets-prep-for-nfp-wv-20231102.html