Solid US jobs data with better than expected July NFP numbers and upward revision to the previous month, as well as average earnings coming along with expectations, inflated US dollar. The single currency fell to the session low at 1.1825 against greenback, with fresh weakness increasing downside risk, after bulls were repeatedly rejected at 1.1900 zone. The notion is supported by extended daily studies for EURUSD pair, as slow stochastic has already emerged from overbought territory and overbought RSI is turning lower. All these are seen as negative signal for corrective action, however, markets need first to fully digest today’s numbers and translate them into inflation, in order to get clearer picture of how will today’s labor sector numbers affect Fed in its plans for starting tightening monetary policy. Today’s close in red and below broken former bull-channel upper boundary (currently at 1.1827) is needed for stronger bearish signal. Next strong support lies at 1.1765 (rising 10SMA), guarding pivotal support at 1.1631 (rising 20SMA), break of which would signal stronger correction. However, overall picture remains firmly bullish (the pair is on track for the fourth consecutive strong bullish weekly close) suggesting that pullback could be seen as a breather before final push towards 1.2000 target.
Res: 1.1889; 1.1910; 1.1950; 1.1975
Sup: 1.1825; 1.1765; 1.1681; 1.1631
