Daily Analysis: Short term buy opportunity for EURUSD from a critical support

I am long term bearish on EURUSD, but in the short term, I think the pair might bounce again from any of the critical support levels. So, I think we should be looking for short term buy opportunities for EURUSD. The pair is heading towards the daily 20 moving average as shown below, which might act as a solid support for the time being.

Looking at the 4 hour chart, the pair is also heading towards the critical support levels as shown below. We can look to buy from any of the two support levels at around 1.3660. Remember, this is a short term opportunity, and the pair should hold daily 20 moving average for the trade to be valid.

To enter into a trade, we want the pair to make a down move as shown in the 1 hour chart below, form a divergence on the 1 hour chart and create a bullish candle pattern.

Initial target should be around 4 hour 20 moving average and final target could be the next resistance at around 1.3770. Stop should be triggered on daily close below 20 moving average.

Reviewing yesterday’s events and trades
Finally, the US dollar gained against most of the major currencies as the Fed refrained from any dovish comments. The market was expecting a dovish statement from the Fed, but instead the statement removed an important paragraph on tightening policy. As a result, US dollar jumped across the board and traded higher against Euro, JPY, pound and Aussie. Before the FOMC statement, ADP Nonfarm payroll employment change data was released, which missed the expectations of 150K and previous reading was also revised down by 15K. US Inflation data was also released, which was mixed and somewhat disappointing.

Fundamental Outlook for the day
US initial jobless claims and Chicago PMI is scheduled to be released for the US today. Market is expecting an 11K drop in the claims, and Chicago PMI is expected to remain stable. If the data does not disappoint, then we can witness further strength in the US dollar. Furthermore, Canadian GDP figure is also lined up, which is expected to register a growth rate of 0.2% against the previous of 0.6%. Also, later in the next Asian session, Chinese manufacturing data will be released, which can act as a catalyst for the risk.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, AUDCAD, EURNZD and NASDAQ.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!