EURUSD--Friday, January 8, 2010
The Fibonacci pattern most recently noted in Monday's post, proved operative again this morning as EURUSD bounced at the 1.4260 level right as the employment numbers were released.
This level was the 1.618 Fibonacci target on the way up from April through November. Once the rally ran out of energy in November around the 2.618 extension, this lower target level became an area of support.
Shown on a weekly chart:
On a 4 hour chart one can see how the bounce this morning came right on the 1.4260 level:
What is significant is not that the EURUSD rallied on the bad employment number, but rather that before the number came out, the market was unable to break through that 1.4260 barrier. Despite all the bullish talk in the market before this number came out--all the talk of early Fed moves, of wildly positive employment numbers, etc.--every time EURUSD approached this 1.4260 level in the past few weeks, sellers have disappeared. This morning was only the latest example of this.