Eurodollar Skyrockets as U.S. Employment Figures Fall Short of Expectations, Leading to Lower U.S. Interest Rates【November 6, 2023】
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Fundamental Analysis
- U.S. employment figures fall below market expectations, leading to a rise in stocks and a weaker dollar due to a decline in long-term U.S. interest rates.
- Dollar straight currency pairs rise, while USD/JPY falls to the mid-149 yen range.
- Eurodollar might be showing a change in the uptrend since July; attention is drawn to the upcoming resistance zones.
USDJPY Technical Analysis
Analyzing the daily chart of the Eurodollar rate. We notice higher lows forming and a recent large bullish candle that signifies a new high. The weakening dollar trend has been amplified due to the decline in interest rates associated with the contraction in the U.S. labor market. As a result, the Eurodollar has broken out of its range, targeting the 38.2% Fibonacci retracement level.
Simultaneously, the 24-day moving average (24MA) is acting as strong support and is perceived as a pivot point in the price. The Relative Strength Index (RSI) is on an upward trajectory, indicating a potential shift to the uptrend seen since the end of July.
Day Trading Strategy (Hourly)
Analyzing the 1-hour chart of the Eurodollar rate. Currently, the 24MA is providing support, but the RSI is at 71, signaling an overbought situation. It might be a good strategy to anticipate a pullback to the 24MA after the RSI drops below 70.
Ideally, aiming for a dip until the RSI nears 50, followed by a buying entry, would be preferable. At the moment, the market has a bullish sentiment, but one should be cautious entering at high levels.
Entry point should be set around USD 1.0665, with a target price at USD 1.0760 and a stop loss at USD 1.0635.
Support and Resistance Lines
The resistance line to be considered in the future is as follows
USD 1.076: Fibonacci retracement
USD 1.070: Round number
Market Sentiment
EURUSD Sell: 79% Buy: 21%
Today’s Important Economic Indicators
| Economic Indicators and Events | JST (Japan Standard Time) |
| Summary of the Bank of Japan Monetary Policy Meeting | 8:50 |
| EU Zone Service Sector Purchasing Managers’ Index | 18:00 |
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
