Non-Farm employment change
NFP on Friday was expected to create some violent moves across major pairs simply because of vast gaps between data of previous months. However, it did not create such extreme volatility as expected. None the less the data came out in favor of the US dollar against the forecast figure of 180K. But the actual figure of 255K was in fact less than previous months actual figure – 292K.
Read previous week’s EURUSD forecast and see how price followed the directions. Remember my analysis is purely technical-based and fundamental analysis is not considered in forecasts. Hence the reason why news events and their impact on the markets are subject to hindsight analysis. However, news events and their impact of the markets tend to be synchronous with my forecasts most of the time.
Is Eur-Dollar heading down?
“Short” answer is, yes.
Again this is based on technical analysis and Elliott wave principle. We stand by the last week’s analysis and there is more down side to come in EURUSD.
the last weeks forecast with updated price movement for the week:
Keeping along with the bearish direction, the hourly chart could produce a short trade setup as early as Monday next week. Here is the hourly chart forecast for short term trades.
Note that the blue arrow is drawn past the structure-bottom of the currently on-going consolidation (or perhaps concluded consolidation at the most recent highest high – as per the wave count.)
Long term context
It is important to have a long term perspective of the direction, even if you trade on a 15 or 60 minute chart. It also provides an extra filter for trades in lower timeframes.
Why technical analysis is necessary even for fundamental traders
The chart would not make sense in terms of direction, if not for the wave count, price channels and overall expectation of the corrective pattern. This sort of wave analysis and forecasting provides a great foundation and confidence in trading during the following days, weeks or even months to come.
Obviously, the reversal points are not always precise. The news events create arguably random price moves. But if there is one method that can objectively predict the market-movements, it is technical analysis, regardless of, whether the predictions are right or wrong.