Nonfarm data influenced positively and the currency was overbought - Wave Analysis 06/09/10

Friday’s data on the US labor market turned out to be above expected. Instead of expected decrease by 100 thousand working positions, the US economy lost only 54 thousand in August. The data for July was also revised from 131 thousand to 54.These positively neutral data triggered some risk-appetite in the market and initiated the EUR/USD growth to the expected level 1.2900. Today there’s no significant statistics coming out on the US and European economy, so Monday’s and Tuesday’s trading sessions are expected to be rather smooth. The trading is currently around 1.2900, and correction in the pair to 1.2780 is a possibility, taking into account profit fixation.

As for the technical side, we can mention a five-wave cycle within h1-h4, with formed RSI divergence, with it being overbought. With the above mentioned resistance level, there’s a chance for a correction to 55 MA, which now resides at 1.2780. Fixation above pivot level 1.2926 is seen as the alternative scenario. If so, target 1.2956 will open with the following 1.3045 in case of a further upward movement.

Analysis by: Forex4you.com written by Joaquin Monfort
Forex4you analyst

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