EUR USD Set Up for Break to 1.3608

The right combination of fundamental and technical factors helped theU.S. Dollar surge to multi-week highs against most major currencies onFriday.

The right combination of fundamental and technical factors helped the U.S. Dollar surge to multi-week highs against most major currencies on Friday. 

Fundamentally, the Dollar rally was triggered by a better than expected U.S. jobs report. The U.S. Non-Farm Payroll Report showed a loss of fewer jobs than forecast which brought confidence to traders that the U.S. was leading the world out of the recession. 

This reaction was different than previous reactions where the Dollar broke on good news. This may be an indication that global traders feel the U.S. financial administrators finally got it right and have put the U.S. economy in strong position to recover well before the rest of the world.

Investors expressed confidence in the change in sentiment toward the Dollar by turning gains from earlier in the week into a cluster of weekly closing price reversals. All these markets have to do is follow-through next week in the direction of the reversal to ignite more selling pressure next week.

Based on the strength of the reversals, it looks as if the Dollar is poised to start a minimum 50% correction of its last break down.
The selling pressure in the EUR USD did serious damage to the chart and has put this pair in a position to post a weekly reversal down.
Today’s trading action took out a major 50% retracement price as well as four up trending Gann Angles, but the worst of the damage is yet to come as this pair is set to make a weekly closing price reversal down on a close under 1.4159.
Based on this developing chart pattern, this market has a chance to break to 1.3608 by June 11 – 12.