EURUSD experienced a brief bullish surge last Friday during the London and New York sessions, primarily driven by mixed economic data where only the Non Farm Payroll that came in with higher result than the forecast, at 336K vs 170K. However, despite the short-lived bullish momentum witnessed on Friday's New York session, EURUSD opened the following Monday with a significant gap down, failing to close it immediately. This gap down suggests that bearish sentiment remains prevalent in the market. EURUSD appears to have encountered resistance within the range of 1.0577 to 1.0588, as highlighted by the orange rectangle.
From a technical standpoint, the Anchored VWAP indicator, plotted since the beginning of September, indicates a bullish bias for EURUSD. This bullish sentiment stems from the price breaking above the first upper band (at 1.0537) of the Anchored VWAP. However, it is worth noting that EURUSD faced resistance at the second upper band (at 1.0576), prompting a rejection and a return to levels below the first upper band at (at 1.0553). The second upper band also corresponds with a value area (1.0556 -1.0600), depicted in pink on the volume profile chart, indicating a region of market equilibrium.
The critical factor to monitor is whether the first lower band (at 1.0478) can provide support from the downward pressure. If this level holds and the price maintains stability above the Anchored VWAP (depicted by the blue line) and within the value area of the volume profile, there may be further upside potential. Conversely, a failure to do so could usher in a resurgence of bearish sentiment.
Key level resistance is at 1.060
Key level support is at 1.0478
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