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Checking out the range pattern on EUR/USD ahead of a potentially busy ending of the week with U.S. jobs data ahead.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/CHF ahead of the Bank of England’s monetary policy decision, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12641.94 -0.14%
FTSE: 6029.93 -1.23%
S&P 500: 3331.70 +0.12%
DJIA: 27273.52 +0.26%
US 10-YR: 0.513% -0.03
Bund 10-YR: -0.547% -0.042
UK 10-YR: 0.096% -0.035
JPN 10-YR: 0.0016% +0.01
Oil: 42.37 +0.43%
Gold: 2079.60 +1.47%
Bitcoin: 11,852.54 +1.33%
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Fresh Market Headlines & Economic Data:

U.S. weekly jobless claims ease, layoffs jump 54% in July

McConnell believes Dems, GOP will reach virus relief deal ‘in the near future’

The Bank of England kept its key rate steady at 0.1% and its bond-buying target unchanged at £745B

Bank of England governor says negative rates are ‘in the toolbox,’ but there are no plans to cut below zero

Bank of England warns UK unemployment will hit 2.5m after Covid-19 slump

Bank of England: Coronavirus downturn less severe than feared

Fastest rise in U.K. construction output since October 2015

German Manufacturing June 2020: new orders up 27.9% m/m (seasonally adjusted)

Eurozone construction downturn slows further: 48.9 in July vs. 48..3 in June

Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:

Australia Services Index at 10:30 pm GMT
Japan Household spending & Average Cash Earnings at 11:30 pm GMT
RBA Statement on Monetary Policy at 1:30 am GMT (Aug. 7)
China Trade Balance at 3:00 am GMT (Aug. 7)
Japan Leading Economic Index at 5:00 am GMT (Aug. 7)

What to Watch: EUR/USD

EUR/USD 1-Hour Forex Chart
EUR/USD 1-Hour Forex Chart

We’ve got quite a few economic updates ahead from around the world, but they’ll all likely be relative volatility duds with the latest U.S. employment update coming on Friday. Traders tend to sit on the sidelines in anticipation of the event, which should be a mover during these economically uncertain times.

With that, I think EUR/USD is the pair to watch for potential short-term opportunities since it is the most liquid USD pair, and we’ve also got pretty clear price patterns on the one hour chart above.  We see mainly ranging behavior over the past week with support and resistance forming at the major psychological levels of 1.1700, 1.1800 and 1.1900.

So, first read Forex Gump’s write-up on the NFP Report to help you form your fundamental bias on the dollar.  After you’ve done your homework, if you’re a bull on the pair, then watch for a potential break above the top of the range (around 1.1900 before considering a long position.

If we get worse-than-expected headline number or downward revisions to previous numbers, odds go up that 1.1900 could easily break and draw in momentum buyers. Given the current uptrend in EUR/USD, this is a high probability reaction in this scenario.

For the bears, if the jobs update comes inline with expectations or better-than-expected, it’s possible we’ll see  USD rally.  Given that the good news may drive potential “broad risk-on sentiment“, the effect may not be that beneficial to the Greenback given its usual safe haven status with traders.

But if we do see USD buying after the event, especially on a read higher than the net 1.2M jobs creation AND any upward revisions to June’s numbers, look out for EUR/USD traders to gun for 1.1750 – 1.700, a target based on the average daily true range of around 95 pips.