• The EURUSD breaks all key supports and now everything revolves around one key level.

Last week, the NFP missed expectations for a second time in a row and the previous numbers were all revised lower. This was seen as a disappointment as the labour market seems to be a touch weaker than previously expected. Nevertheless, the unemployment rate fell once again and lessened the disappointment from the miss in the payrolls number. The worse part for the Fed is that the average hourly earnings beat expectations, and such high wage growth is not consistent with a sustainable return to the 2% target. It’s worth reminding though, that the Fed will see another NFP report before the September meeting, so this NFP doesn’t change much, but the data leading into the meeting can still weigh on sentiment.

The ECB, on the other hand, hiked by 25 bps and changed a line in the statement that leant more on the dovish side. President Lagarde didn’t hint to what we can expect next and, in line with the Fed, just reaffirmed their data dependency and kept all the options on the table. The data for the Eurozone has been consistently missing expectations, but the recent inflation and employment reports remained strong justifying another rate hike in September all else being equal.

EURUSD Technical Analysis – Daily Timeframe

EURUSD Daily

On the daily chart, we can see that EURUSD not only broke below the 1.1033 support but also the upward trendline which was acting as the last line of defence for the buyers. The bias now is clearly bearish as the price has breached all the key support levels and the moving averages have crossed to the downside. The first target for the sellers should be the bottom trendline around the 1.08 handle.

EURUSD Technical Analysis – 4 hour Timeframe

EURUSD 4 hour

On the 4 hour chart, we can see that the price has recently rallied following the miss in the NFP report last Friday into a strong resistance level where we can find the downward trendline, the 50% Fibonacci retracement level and the previous support turned resistance. This is where the sellers should pile in with a defined risk above the resistance to target the 1.08 handle. The buyers, on the other hand, will need the price to break above the 1.1040 level with conviction to invalidate the bearish setup and start targeting the highs.

EURUSD Technical Analysis – 1 hour Timeframe

EURUSD 1 hour

On the 1 hour chart, we can see that we have a minor support level at 1.0960. More conservative sellers may want to wait for the price to break below that level before piling in and ride the bearish wave into the 1.08 handle.

https://www.forexlive.com/technical-analysis/eurusd-technical-analysis-everything-revolves-around-this-key-level-20230808/