Nice technical setup today on 4 hour EURUSD charts. The NFP was the excuse of breaking the neck of this head & shoulders formation which also pierced a strong and significant support around 1.2630.
In the bigger picture, today's breakout should aim the next significant support around 1.2450 which is a 38.2% Fibonacci retracement of the trip from 1.1640 to 1.2980, a 200-day SMA (the EMA is at 1.2540) and two June and July lows (see the daily EURUSD chart below).
On a weekly EURSUD chart we notice that the last Fibonacci retracement (61.8%) of the fall from 1.3665 to 1.1640 was tested and marginally breached several times the last months but held well so far which may mean that a full retracement back to the 2004 highs is not yet in the cards and we need to wait a bit longer. It may also mean that a full retracement is not in the cards at all and the bearish trend started in 2005 will resume, but I place low odds to this last possibility given the overall fundamental view of both European and American economies. Anyhow, the good thing is that we shall probably see more action in the forex markets after this NFP Friday.