Holding above 1.1400, the EUR/USD pair rallied up to 1.1615, its highest since August 2015 last Wednesday, but ends the week in the red. Poor US Q1 GDP readings fueled the early rally, although there was no clear catalyst for the following decline, which started as a correction and some profit taking ahead of the US employment report.
View the Live chart of the EUR/USD
Finally out, the April US Nonfarm Payroll showed that the economy created less jobs than expected, and that salaries barely advanced. Overall, the report was mixed, yet the greenback continued gaining, particularly against its European rivals. Why? because the weak side of the report was not enough to deny the possibility of a rate hike in June.
Despite growth stalled in the US mid 2015 and slowed by the end of the year, situation that extended into the first quarter, there's an unexplainable sentiment that the FED will rose rates anyway at least two time this year, the first one in June and the second one in December, with September elections preventing the FED from acting that month.
The US Central Bank has largely repeated that rate hikes are data dependent, and if we rely on the latest macroeconomic indicators, the FED should remain on hold for longer. But market's hopes are strong, and investors are not willing to push the greenback so much lower.
The upcoming week will be fulfilled with macroeconomic data, and probably Chinese one will be the most relevant, as it will give some clues about worldwide health. If China picks up, the rest of the world will likely follow, and therefore the pressure over US economy will become to ease.
Anyway, The EUR/USD pair is not yet ready to give up, according to technical readings, as in the daily chart, the technical indicators have bounced from their mid-lines after correcting overbought readings, while the price remains well above its moving averages, with the 20 SMA around 1.1350 an 100 SMA 200 pips lower. In the weekly chart, the pair tested the 100 SMA before retreating, whilst the technical indicators have lost upward potential but remain well into positive territory, all of which maintains the risk towards the upside.
To confirm further advances, however, the price needs to settle above 1.1460 and then run through 1.1530 to be able to retest the highs above 1.1600 and extend up to 1.1713, August 2015 daily high. A decline through 1.1350 can see the pair sliding towards 1.1280, while further decline below this last can see the pair ending the week in the 1.1160/1.1200 region.
Latest updates on the EUR/USD Forecast
View the Live chart of the EUR/USD
Finally out, the April US Nonfarm Payroll showed that the economy created less jobs than expected, and that salaries barely advanced. Overall, the report was mixed, yet the greenback continued gaining, particularly against its European rivals. Why? because the weak side of the report was not enough to deny the possibility of a rate hike in June.
Despite growth stalled in the US mid 2015 and slowed by the end of the year, situation that extended into the first quarter, there's an unexplainable sentiment that the FED will rose rates anyway at least two time this year, the first one in June and the second one in December, with September elections preventing the FED from acting that month.
The US Central Bank has largely repeated that rate hikes are data dependent, and if we rely on the latest macroeconomic indicators, the FED should remain on hold for longer. But market's hopes are strong, and investors are not willing to push the greenback so much lower.
The upcoming week will be fulfilled with macroeconomic data, and probably Chinese one will be the most relevant, as it will give some clues about worldwide health. If China picks up, the rest of the world will likely follow, and therefore the pressure over US economy will become to ease.
Anyway, The EUR/USD pair is not yet ready to give up, according to technical readings, as in the daily chart, the technical indicators have bounced from their mid-lines after correcting overbought readings, while the price remains well above its moving averages, with the 20 SMA around 1.1350 an 100 SMA 200 pips lower. In the weekly chart, the pair tested the 100 SMA before retreating, whilst the technical indicators have lost upward potential but remain well into positive territory, all of which maintains the risk towards the upside.
To confirm further advances, however, the price needs to settle above 1.1460 and then run through 1.1530 to be able to retest the highs above 1.1600 and extend up to 1.1713, August 2015 daily high. A decline through 1.1350 can see the pair sliding towards 1.1280, while further decline below this last can see the pair ending the week in the 1.1160/1.1200 region.
Latest updates on the EUR/USD Forecast
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