Trading levels for major markets over the US nonfarm payrolls
Ahead of Friday’s US nonfarm payrolls (NFP) release, what are the major levels you need to watch for the major global markets?
AUD/USD traded sideways throughout the whole of February in a range of only 140 pips. March saw a little more volatility with a sideways range of 200 pips. However, we are only trading sideways and in fact, if you look at the weekly chart, we have been in one big sideways trend for over a year.
AUD/USD meets strongest resistance in the short term at 7610/20. A break higher would targets 7670/75 and perhaps as far as 7700/05. On further gains, look for a re-test of the important one-year trendline and recent highs at 7735/45.
A break below 7540 would target good support at 7525/15. Long positions need stops below the March low of 7488. A break lower would target the 500-day moving average at 7431/27.
EUR/USD has spent four days testing strong support at 1.0660/50, stuck in a range of only 50 pips during this time.
The pair is holding strong support at 1.0660/50, targeting 1.0680 and first resistance at 1.0700/10. We got to within 10 pips on Wednesday and should struggle here again before the NFP. On further gains look for a test of resistance at 1.0740/50, then 1.0802/07.
Strong support at 1.0660/50 is holding but long positions need stops below 1.0620. If we are still in a three-month bull trend, this should be the low. A break below 1.0620, however, targets three-month trendline support at 1.0590/80. If you try long positions here, use stops below 1.0545.
USD/JPY and gold
USD/JPY is managing to hold above the 110.20/10 March low so far this week. Obviously this is the most important support level of the week. Long positions are risky with bears seemingly well in control and the pair no longer oversold.
Be ready to sell a break below 110.00, targeting 109.75/70 and then 109.20/10. We really have no decent support until 108.50/40, where I would look for a buying opportunity.
Holding the 110.20/10 low allows a recovery to 110.70/80 before stronger resistance at 111.35/40. Short positions need stops above 111.65. A break higher, however, targets a selling opportunity at 112.15/25.
Gold has been trading sideways for two weeks in a 20-point range. The market bounced well to re-target strong 200-day moving average resistance at 1259/61, which has held on at least three tests over the past month. So the question is: do we stay in a range or break higher?
Short positions need stops above the February high of 1263/64. However, a break higher is a strong buy signal, so you will have to be ready to stop out of shorts and reverse into a long position.
Be ready, therefore, to buy a break above 1264 to target nine-month trendline resistance at 1280/81, and perhaps as far as three-month trendline resistance at 1286/88 for profit-taking on all long positions.
Failure to beat strong resistance at 1259/61 re-targets 1254/53 and perhaps as far as 1250. If we continue lower, look for support at 1246/45. A break below last week’s low at 1240/39 would target a buying opportunity at 1236/35.
The E-mini S&P does appear to be developing a short-term bear trend and I do think we will go lower eventually, but it’s difficult to hold short positions in a bull trend. You do get spikes higher, as bulls try to regain control, as we saw on Wednesday.
A break below 2339 looks likely and targets support at 2333/32. If we break lower this would target 2327/25 and then strong support at 2318/15, which worked perfectly last week. It would therefore be worth profit-taking on short positions.
However, if this is the developing short-term bear trend that I expect, we will eventually break lower (I cannot be sure it will happen on this test) to target the 100-day moving average at 2292/90.
The first resistance at 2352/54 is only minor, but a move above here targets 2361/63. I do think gains are likely to be limited. However, a move above 2368 re-tests the high this week at 2375.
Technical Analyst & Trader
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