Good afternoon Forex Kings,
A bit of a kick in the teeth last night. Stop losses were hit on a huge spike on the AUDUSD. This spike can be found across numerous AUD pairs. This could have been a short squeeze.
We are continuing to focus on the USD as tonight the US reports its next round of initial jobless claims. The result the week previous recorded a blockbuster number of 3.2 million jobless claims.
Estimates for this weeks number is ranging from 3.7 million – 5.5 million (Goldman Sachs). This suggests we could see a weaker US tonight if the number escalates further.
Last night the US reported its ADP employment change (this gives an indication into the NFP on Friday night), the result was not as bad as everyone had initially thought, however this is a backwards looking indicator as it was referring to dates prior to the lock down in the US.
EURUSD Technical Analysis
1 Hour Charts
Previously we bought in too early. The market has now created an A-B-C corrective structure after a 5 wave structure higher. This suggests we will now see another 5 wave structure higher.
The ABC structure is also a potential bull flag formation.
The jobless claims in the US could be the catalyst for this.
Trade Setup 2: BUY LIMIT – Entry price 1.0900, stop loss 1.0840 and take profit 1.1150
Stop loss: 60 Pips
Take profit: 250 Pips
We may enter early if the market breaks to the upside prior to our entry price, we will keep you posted!