Daily F.X. Analysis, February 10 – Top Trade Setups In Forex – Post NFP Trade Plan! 

The U.S. Labor Department reported that the economy added 225,000 nonfarm payrolls in January, higher than the addition of 162,000 expected. Meanwhile, the jobless rate climbed to 3.6% (3.5% expected). Average hourly earnings grew 0.2% on month (+0.3% expected) and were up 3.1% on year (+3.0% expected).

Official data showed that wholesale inventories (final reading) fell 0.2% on month in December (-0.1% expected).

Economic Events to Watch Today 

 

 

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EUR/USD – Daily Analysis

The EUR/USD dropped 0.3% to 1.0945, the lowest level since October. Official data showed that German industrial production contracted 3.5% on month in December (+0.6% expected), the largest decline in a decade.

The EUR/USD currency pair bullish moves could be limited mainly due to the risk-off market sentiment as coronavirus fears still on the peak and at the front of the latest news, recorded more than 37,000 known cases across the globe and 813 deaths so far.

The investors may ignore the China data in Asia due to coronavirus fears, which showed producer price index, a gauge of factory gate prices, edged up 0.1% on year in January, compared with a 0.5% decline in December. 

At the data front, Eurozone’s Sentix Investor Confidence (Feb) will be released at 09:00 GMT. On the other hand, the focus will be on the Federal Reserve President’s speech and short-term bill auctions.

 

Daily Support and Resistance

• S1 1.0874
• S2 1.0916
• S3 1.0931

Pivot Point 1.0957

• R1 1.0972
• R2 1.0998
• R3 1.104

EUR/USD– Trading Tips

On Friday, the EUR/USD broke below the horizontal support level of 1.0995, which is now working as a support level for the EUR/USD pair. Closing of candles below this 1.099 is confirming a breakout and demonstrates that this level is currently working as a resistance. It may keep the Euro bearish until 1.09374. 

On the 4 hour timeframe, the pair’s MACD is closing histograms under 0, demonstrating chances of further selling in the pair while the bearish channel is also likely to get violated until and unless Nonfarm payroll comes out better than expected. 

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GBP/USD– Daily Analysis

The GBP/USD slid 0.3% to a six-week low of 1.2893, the weakest level since November. The currency pair bearish trend also could be the reason for coronavirus fears because investors were sacred and poured money into the safe-haven treasuries. As in result, the greenback succeeded in gaining support from it.

At the front of the latest news, I have recorded more than 37,000 known cases across the globe and 813 deaths so far. As a result, the U.S. ten-year treasury yields continue to positive around 1.58%, whereas Asian stocks register mild losses by the press time.

Looking forward, due to the lack of data in the economic calendar, the traders will find clues from China and the U.K. headlines for taking fresh directions. Whereas, the positive headlines will likely support the pair. 

The GBP/USD is gaining momentum over the weaker dollar as the U.S. Labor Department reported that the economy added 225,000 nonfarm payrolls in January, higher than the addition of 162,000 expected. Meanwhile, the jobless rate climbed to 3.6% (3.5% expected). Average hourly earnings grew 0.2% on month (+0.3% expected) and were up 3.1% on year (+3.0% expected).

Daily Support and Resistance

• S1 1.2753
• S2 1.2831
• S3 1.2858

Pivot Point 1.2909

• R1 1.2936
• R2 1.2987
• R3 1.3065

GBP/USD– Trading Tip

A day before, the GBP/USD broke below 1.2950 support is to test the next support level of 1.2925. It’s the most crucial level for the GBP/USD as a violation of this level can lead Sterling prices further down towards 1.2870 and 1.2830 in the coming week.  

At the moment, the GBP/USD has neutral candles below 1.2920 support level, which is suggesting a bearish trend in the GBP/USD. The MACD and RSI are holding in the bearish zone, supporting selling bias for the GBP/USD pair. 

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USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped below the 110 level, mainly due to greenback losing its bullish momentum ahead of the pre-NFP data. The USD/JPY currency pair s currently trading at 109.97 and consolidates in the range between the 109.81 – 110.03. The currency pair registered a fresh high at 110.03 during early Asia but failed to maintain and dropped again.

We have seen a strong run in U.S. equities despite the renewed threat of the coronavirus while the Japanese yen felt the stampede nonetheless. 

At the coronavirus front, China declared the latest update that there were an additional 73 deaths losses and 3,143 new cases of the coronavirus in China as of the end of February 6, the National Health Commission said in its daily update on Friday. This brings the total number of deaths in China to 636 and the total number of confirmed cases to 31,161.

Meanwhile, U.S. 2-year Treasury yields consolidate in the narrow range between 1.43% and 1.47%, and 10-year yields moved between 1.63% and 1.68%. Moreover, the markets are pricing a 10% chance of a rate cut at the next Fed decision on March 18, and a terminal rate of 1.18% (vs. Fed’s mid-rate at 1.63% currently).

Looking forward, the trader’s focus will be on January nonfarm payroll and hourly earning for taking fresh direction.

Daily Support and Resistance

• S1 108.57
• S2 109.11
• S3 109.47

Pivot Point 109.66

• R1 110.01
• R2 110.2
• R3 110.75

USD/JPY – Trading Tips

The USD/JPY pair is trading with a bullish bias in the wake of weakening Japanese yen. The pair has crossed over 109.300 resistance level, and it seems to head towards 109.850. On Wednesday, the USD/JPY is likely to find resistance around 110.300 after violating 109.850. While support remains at 109.250. The RSI and MACD have crossed over in the buying zone and are supporting the bullish bias. Let’s look for buying trades above 109.26 today.

All the best for today!