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The Non-Farm Payrolls report was terrible on almost all fronts, with poor jobs growth, negative revisions and unimpressive wage gains. It was extremely hard to find positive data in the report that not only disappointed in absolute numbers but also carried expectations for upwards revisions.

The negative reaction in the US dollar has been strong this has triggered an interesting challenge for EUR/USD on the topside. A break or a bounce? What levels should we watch?

EUR/USD levels

As the chart shows, the pair is trading in a narrowing triangle. The upper part of the wedge is  steeper and now it is being challenged. There is still no break but the pair is very close.

EURUSD Technical analysis October 5 9 2015 euro dollar sentiment fundamental outlook

The high so far has been 1.1311 and the really critical resistance level is 1.1460. Immediate resistance is at 1.1373 as this was an important level in the distant past as well as the recent present. The August high of 1.1712 is also an important line, but  not as strong as the one above it.

On the downside, 1.1290 serves as immediate support, followed by 1.1215.

Will we see a breakout out of range or is it too soon to tell?

EUR/USD fundamentals

The pair gains from the fall of the US dollar across the board and also due to the euro’s new role as a safe haven currency. However, if the US cannot lead the world, can Europe?

If this report and perhaps  not good enough reports push a rate hike beyond 2015, will it trigger action from the ECB? Draghi showed no rush in his recent appearance and he even talked about economic growth coming.

But will he be forced to change his mind?

More:  EUR: Fed Hike & ECB QE2; October Outlook & Forecast – BofA Merrill