The wall to break on US labour report, small short
IF the report is good that is. As per previous months, the emphasis will lie with the earnings and participation levels rather than the actual NFP number.
Already today we have seen a double top forming at 109.75/77 with the one on the 26th Jan. What waits above is a bigger wall the tear down though. We have a cluster of trend lines,
fibo’s from the Sep-Nov 2017 move up and MA’s all waiting in that 109.80/110.40 area. I highlighted this area already in a previous post but wanted to narrow it down a bit for tomorrow.
I did cover the last little shorts I had on month end yesterday as we failed to stay low (below Ryan’s 108.50 super support level that is ) and waited for today’s cross JPY action to water down a bit to open a small short again at 109.45 as we failed the double top and came back sub 109.50 small trend line from the 15.Jan.
If we get a quick rejection back down to 108.50/75 ahead of the data tomorrow I will cash in, but if not I’m willing to run at least half of it into the US Labour report and add a pinch in the 110.00/20 area on a mildly better number spike into the resistance area. On a weak one partial take profit in the 108.50 zone for a starters. If we get a break under 108.25 I’ll be looking at a deeper move as that would ask for a majorly disappointing number, which should add negative weight to risk pairs, possibly reversing the move we’ve seen today.
In case we get a much better report I will stop through 110.15 and buy JPY crosses as risk should get an additional lift, especially in EURJPY and GBPJPY which would see a follow through on today action.