Technical Analysis EURUSD : 1 October 2014

Nonfarm: euro sentenced?

Today at 14:15 CET we expect the release of the key US macroeconomic index: ADP Non-Farm Employment Change. This indicator is published in monthly terms by Automatic Data Processing. The characteristics are based on anonymous data study of approximately 400,000 American business clients. The analysis does not include the agricultural sector and government posts. The tentative estimate of employment level is released two days before the official publication of Non-Farm index by the US Bureau of Labor Statistics. That is why this index is worth a closer examination. Employment is the key factor influencing the US consumer demand, so if the index performance is higher than expected, it will almost certainly lead to an increase in the US investment and raised demand for the US dollar against other liquid currencies, including the euro.
Here we consider the EUR/USD behavior on the H4 chart. At the moment the price is drifting near the support line of the monthly trend channel. According to Parabolic trend indicator and the direction of the current H4 trend, the market is still under the bearish influence. This fact is also confirmed by the Donchian Channel(13) direction, which lower boundary passes through the monthly support line. There is no contradiction on the part of the RSI-Bars oscillator: further trend consolidation is to be expected after crossing the oscillator support at 18.2648%. We suggest this happening at the price breach of the fractal level at 1.25690, which coincides with the monthly support. This important event will certainly encourage a large-scale movement of the European currency. That is exactly the reason why this mark can be used to place a pending sell order. Initially Stop Loss is placed at the nearest fractal resistance at 1.26375.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal peak. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.25690
Stop loss above 1.26375

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