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Faraday: USD reacting to NFP - EURUSD heading to 1.11
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Friday’s non-farm payrolls came in below expectations and this eventually led to a dollar sell-off.
Thomas Light from Faraday Research has been looking at the daily price chart of the dollar index, spotting a brief spike higher after which the dollar reversed to close on its lows.
"This formed a bearish engulfing pattern and indicates that the dollar will remain range bound and we expect prices to retest the bottom of the range this week." says Thomas, he believes the best way to play this short-term dollar weakness is through EURUSD.
EURUSD’s daily candle chart shows that the Euro was showing signs of strength even before Friday’s non-farms, forming several bullish tailed candles.
Faraday's strategy for EUR/USD this week is to trade a move back up into 1.1100. Any stops should go below today’s low at 1.0930.