Eur/usd - page 390
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Yesterday the EURUSD continued the rallied but with a narrow range and managed to close near the high of the day, furthermore closed above the previous day high, suggesting a strong bullish momentum.
However it made a pause on mid-term resistance at 1.1236 possibly waiting for today’s nonfarm payrolls number.
The pair continues to close above the 10, 50 and the 200-day moving averages that are acting as dynamic support.
The key levels to watch are: The daily resistances at 1.1556, other daily resistance at 1.1460, daily support at 1.1097, the 200-day moving average at 1.1028 (support), the 10-day moving average at 1.0965 (support) and the 50-day moving average at 1.0910 (support).
EUR/USD: Buck Strengthens After Solid Wage Growth Figures According to the latest US Bureau of Labor statistics, the unemployment rate ticked lower to 4.9% in January, but the payrolls moderated to 151,000, down from 262,000 previously (downwardly revised from 292,000), but still maintained a healthy jobs growth. In addition, average hourly earnings swelled to 0.5% from 0.0% month-on-month, with the yearly print remaining at 2.5%.
Manufacturers added a strong 29,000 staffers last month, in sharp contrast with the 2,000 decline in jobs forecasted by the market following very weak reports from the industry. In fact, the January figure marked the highest increase in factory jobs since August 2013.
The reaction was mixed and the pair jumped to $1.1240 and then eased back below $1.12, while stabilizing later some 40 pips lower around 1.1160.
Volatility has been very high this week and the greenback has dropped broadly, with a correction still ongoing. However, any worsening of the global growth outlook should strengthen the US dollar due to its reserve currency status.
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EUR/USD confirmed the break of yesterday's 200-day moving average and now the key support stands around $1.1040/50.
The US job data killed the EUR/USD elevation but it still moving over the 1.1119 support today.
EUR/USD: Pair Soars Over Week, Back in Bullish Trend It was a very volatile week and the greenback lost ground, which brought the pair back to the $1.12 mark. More importantly, it is now back in a bullish mode. The pair added more than three big figures over the week and ended 2.97% higher at $1.1159.
On Monday, Germany's manufacturing PMI for January declined to 52.3 from 53.2, while the French gauge also decelerated to 50.0 from 51.4 previously. Moreover, manufacturing activity in the US contracted for the third month in a row in January, the Institute for Supply Management said on Monday. The ISM gauge remained unchanged at 48.2, while analysts had expected a 48.5 print. The US dollar was trading near daily lows after the data and the pair was hovering around the $1.09 handle.
Tuesday brought no important figures and therefore the EUR/USD pair was only consolidating, with no impetus to move.
From the euro perspective on Wednesday, France's services PMI ticked higher to 50.3 from 49.8 in January, while the German gauge decelerated to 55.0 from 56.0. The figure for the whole euro zone dropped to 53.6 from 54.2 previously. Moreover, retail sales for December improved to 0.3% from -0.3% month-on-month and on a yearly basis stayed at 1.4%. The euro did not react to these figures.
From the US dollar point of view, the ADP employment report from January moderated to 193,000 from 267,000 but still maintained a solid pace of employment growth. More importantly, the services PMI for January fell to 53.2 compared to 54.3 in the previous month.
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EUR/USD forecast for the week of February 8, 2016 The EUR/USD pair broke out to the upside during the course of the week, clearing the 1.1050 level. Because of this, the market looks as if it is ready to continue to try to go higher, but it should be rather resistive all the way up to the 1.15 handle. Pullbacks will offer buying opportunities, but quite frankly we think it’s easier to play this market off of the daily charts instead of the weekly chart. We have no interest in selling at this moment in time as the market seems to be so well supported.
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There is nothing in front of the pair to stop the price climbing MA and resistance levels are broken.
It seems like the pair is far from parity now.
In my opinion, the next levels to watch for are: support - 1.0812, resistance - 1.1246.
EUR/USD Outlook: Volatility to Persist Amid Sparse Macro Calendar The euro managed to return back to the bullish trend, although further gains will be harder to achieve as the European Central Bank (ECB) should 'do something" at its March meeting. This should limit the upside potential on the pair.
Monday will see German industrial production for December while Tuesday will bring the current account and trade balance from Germany as well.
On Friday, German CPI and GDP figures are due, followed by GDP figures for the forth quarter from the whole euro zone. Industrial production is expected also and should tick up on a monthly basis.
From the US dollar perspective, the Labor Market Conditions Index is due on Monday and JOLTS Job Openings will be released on Tuesday. However, these numbers are not considered as major and rarely have any impact on the US dollar.
Federal Reserve (Fed) Chair Janet Yellen is due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC on Wednesday. This testimony will be closely watched as Yellen might present some new view on monetary policy (possibly dovish), which would be US dollar negative. She will conclude her testimony on Thursday.
Friday will bring US retail sales for January, which are projected to improve from previous levels. In addition, the University of Michigan consumer confidence gauge is due and should tick higher to 92.5 from 92.0 previously.
Technically speaking, the pair broke all resistances on Wednesday and is now in a bullish trend. The key support for now stands around $1.1040/50, where previous strong highs are located. The resistance is seen at $1.12 as the pair failed to post a clear daily close above it. If it falls, a further rise toward $1.14 in the near term is likely as the momentum is bullish.
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