Be careful! Price movements on the charts of major currency pairs, especially EUR/USD, have already begun to give early signals for changes in price trends.
This follows the market’s reaction to the U.S. NFP jobs report last Friday which saw a rather mixed reading.
The increase in employment for June was positively higher than expected, but the unemployment rate rose higher than expected.
After that, the rising US stock market also pushed the depreciation of the US dollar as a safe-haven currency. Meanwhile, US 1-year bond yields also remained weak hovering below the 1.50%level.
Thus, the US dollar closed trading last Friday significantly weaker although at the beginning of the NFP report was published, the US dollar showed little strengthening.
On the EUR/USD chart, the price dropped almost touching the 1.18000 level at the support zone, however the price rebounded and passed the Moving Average 50 (MA50) barrier on the 1 hour time frame of the price movement for the initial signal of a bullish trend change.
If the US dollar continues to weaken earlier this week, the upside is expected to test the resistance at 1.19000.
Successfully overcoming the resistance, a clearer uptrend will push the price to head to the higher resistance zone around 1.20000.
On the other hand, if the price resumes last week’s decline, the 1.18000 support zone will continue to be the focus target.
A lower decline below that zone will make the latest focus at the support level around 1.17200.
