FxWirePro: EURUSD forms hammer pattern, jump till 1.1080 likely

Candlestick pattern - Hammer (daily chart)

Major support - 1.09250-30 (trend line )

EURUSD has halted its 8 days of losing streak and shown a nice recovery of more than 80 pips from low of 1.09259 after weak US ISM manufacturing data. US ISM manufacturing index came at 49.2 in August compared to 51.2 in Jul and reading below 50 indicates contraction. The pair break major psychological resistance 1.1000 and is currently trading around 1.10113.

US bond yield hits the lowest level since Jul 2016 at 1.428% and yield curve inversion is gone with the spread between US-10 year and 2-year has widened from -5 bpbs to 2.5 bps.

Technically, on the higher side near term resistance is around 1.10300 and any violation above will take the pair to next level till 1.10500/1.10880.

The major weakness will be seen only below 1.09250 level and any break below will drag the pair to the next level till 1.0880/1.08500.

It is good to buy on dips around 1.0980-825 with SL around 1.09250 for the TP of 1.10880.