The EUR/USD is poised to close the week at its lowest level in almost 10 years, following a tricky US employment report: the headlines had been for the most outstanding, albeit wages ticked lower, anticipating some poor inflation readings for next week. And that could become an issue for those betting on rate hike as soon as April in the US, as the FED will be in no urge to raise rates if inflation is below the 2.0% target.
Anyway and from a technical point of view, the pair has left a weekly opening gap at 1.2000 unfilled, and trades near 200 pips below it, having found short term selling interest around the 1.1850 ever since breaking below it. As I said earlier today, the dollar rally has extended too much too fast at this point, and risk of a sudden upward correction has increased exponentially, even if it’s only corrective. But technical, both the daily and the weekly chart maintain the strong bearish tone, with indicators biased lower despite in extreme oversold levels.
For the upcoming days, rather than the 1.1850, the resistance level to watch will be the 1.1900 area, where there are much more relevant long term highs and lows. If somehow the pair regains the level, it may extend its advance up to 1.2000 and finally fill the gap above mentioned. At this point, gains above 1.2000 seem quite unlikely.
If the imbalance between fundamental data continues to favor the greenback on the other hand, a break below 1.1753, the current multiyear low, should see a quick selloff towards 1.1650, a strong long term support area. Unbelievable, if this last gives up, the slide can extend down to 1.1500.
Anyway and from a technical point of view, the pair has left a weekly opening gap at 1.2000 unfilled, and trades near 200 pips below it, having found short term selling interest around the 1.1850 ever since breaking below it. As I said earlier today, the dollar rally has extended too much too fast at this point, and risk of a sudden upward correction has increased exponentially, even if it’s only corrective. But technical, both the daily and the weekly chart maintain the strong bearish tone, with indicators biased lower despite in extreme oversold levels.
For the upcoming days, rather than the 1.1850, the resistance level to watch will be the 1.1900 area, where there are much more relevant long term highs and lows. If somehow the pair regains the level, it may extend its advance up to 1.2000 and finally fill the gap above mentioned. At this point, gains above 1.2000 seem quite unlikely.
If the imbalance between fundamental data continues to favor the greenback on the other hand, a break below 1.1753, the current multiyear low, should see a quick selloff towards 1.1650, a strong long term support area. Unbelievable, if this last gives up, the slide can extend down to 1.1500.
