Daily Analysis: EUR/USD Short Term Sell Opportunity

EUR/USD traded above the 1.3740 level, earlier in the Asian session. I think the upside is limited for the pair. There is also a bearish hidden divergence on the daily chart, as shown below. So, I think we should be looking for a short term sell opportunity.
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Looking at the 4 hour chart of EURUSD, the RSI is at the extreme level, and there is a continuing divergence as well, which adds value to our bearish view for the pair.
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There is an up-move trend line, as plotted on the 1 hour chart shown below. There is also a support at around the 1.3740 level. So, if the pair moves lower, breaks this trend line and the most relevant support and closes below it, then we will enter a sell trade. Remember, ECB President Draghi will be speaking later in the day. So, we will execute this trade only after his speech.
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Initial target should be around the 4 hour chart 20 moving average, and final target could be around the daily 20 moving average. Stop should be placed above the broken trend line and support level.

Reviewing Friday’s events and trades
Friday was an eventful day, as we had NFP and unemployment data for the US. The outcome was positive as the Nonfarm payrolls registered a gain of 203K jobs, against the expectations of 180K. The US unemployment rate also fell from 7.3% to 7%. The fall in the unemployment rate is very important, which might affect the fed’s future plans. The market may now start pricing in a QE taper after this outcome. Other than this, Michigan’s consumer sentiment data was also released, which jumped to 82.5 from 75.1.

Fundamental Outlook for the day
There is no major fundamental release for the US in the coming session. The only low-risk event scheduled is the US wholesale inventories data. Moreover, ECB President Mario Draghi will be speaking later in the day, which may cause some movements for the Euro. Other than this, the UK’s NIESR GDP estimate will also be released in the NY session. Later, in the next Asian session, Australia’s Westpac consumer sentiment figure will be released. I do not expect any major movements during the day friends. So, trade accordingly.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBP/USD, EUR/GBP, GBP/AUD, USD/JPY, EUR/CAD, GOLD and OIL.