EURUSD Technical Forecast on NFP 07.02.2025Overall Trend & Context:
The EURUSD pair is in an overall downtrend on the higher time frames and has recently been consolidating on the lower times.
Fundamental Considerations for the NFP:
Consensus Forecast (High Probability) - Most analysts forecast a gain in the 169K–170K range, which lines up with recent trends. A neutral result would suggest that the labor market is still solid.
Stronger-than-Expected Outcome (Medium Probability) - If the report comes in well above consensus (eg: above 190K jobs), it could reinforce expectations for a more hawkish stance by the Federal Reserve.
Weaker-than-Expected Outcome (Low Probability) - A result below expectations (eg: fewer than 135K jobs) might trigger a reassessment of the US economic outlook, we will need to watch the markets and prepare for dynamic shifts.
Technical Findings:
Weekly - Bearish and trading well below EMA's.
Daily - Bearish & showing signs of 25 EMA rejection. Previous distribution is holding price at bay.
4 Hour - Strong supply levels holding and trading below the 200 EMA.
1 Hour - Close to overbought levels and LTF distribution is holding.
Important Notes:
DXY is at a previous demand which proved to be a challenge to break through in the past.
GBPUSD & EURUSD can have variations in the short term correlation but the technicals both align, which reinforces our EURUSD narrative.
USDJPY technicals remain bullish on the long term however, the short term is in a downtrend and has reached a daily demand - we could potentially see a bullish reaction from here (based on DXY strength and the negative correlation with EURUSD)
Potential Scenarios & Probabilities:
If the lows at 1.03800 fail we may need to adjust our entry zones based on where liquidity and supply are found.
If price reaches the weaker supply level closer to the release of the NFP we can enter, however there is a chance we could get stuck in some drawdown if supply isn't strong enough to push through.
HIGH PROFILE NEWS RELEASES ARE DOUBLE EDGED IF YOU'RE NOT CAREFUL. YOU DO NOT NEED TO BASE YOUR ENTIRE TRADING CAREER ON IT. STAY OUT IF YOU'RE NOT COMFORTABLE TRADING NEWS.
AS TRADERS, YOUR PRIMARY JOB IS TO PROTECT YOUR CAPITAL - WITHOUT CAPITAL YOU CAN'T MAKE ANY MOVES.
Trade smart.
Hope you all make money if you're trading today!
Apex out!
OANDA:EURUSD FX:EURUSD FOREXCOM:EURUSD OANDA:USDJPY TVC:DXY OANDA:GBPUSD PEPPERSTONE:GBPUSD FX:USDJPY
