[cppene]

Today’s data appears to be a major development with a significantly better than expected non farms payroll number (although not positive as some were hoping for), and an improvement in the unemployment rate. This has sent U.S. 2 year yields significantly higher

What else does this mean? Another key development that has taken place is that the USD has rallied.

EURUSD has started to fall despite the supposed ‘risk’ relationship that has been a relatively popular theme for some time now.

Time will tell if today’s developments have really turned out to be important for the USD, though we must ask the question “What do we look for if an important USD rally lies ahead?”



• EURUSD has been in an uptrend and has traded above the 55 day moving average for several months. The 55 day moving average now comes in at 1.4854 with the trend support converging with it.
• Near term horizontal support below that is at 1.4827 which is also the short term double top neckline (the pattern would target 1.4512).
• A firm close below these levels would be a significant development that would suggest the weeks ahead will see a very good squeeze that could take EURUSD down to the 200 day moving average currently at 1.4086.
• Note that it was this time last year when the large 55-200 day moving average gap was filled on EURUSD.