EUR/USD analysis: downward pressure mounts
|EUR/USD Current Price: 1.1217
- Mixed US employment data won't change Fed's curse of action.
- German weak data keeping the EUR under pressure.
The American dollar maintained a positive tone by the end of the week closing Friday mostly higher after a mixed US employment report. The EUR/USD pair closed the week marginally lower at 1.1215 after another failed to attempt to advance beyond 1.1245, the 23.6% retracement of the 1.1447/1.1183 decline. According to the official release, the US added 193,000 new jobs in March, surpassing market's expectations, while February reading was upwardly revised t0 33K from 20K. The unemployment rate remained steady at 3.8%, despite the participation rate decreased to 63.0%, anyway beating expectations. Wages' growth disappointed, up by 0.1% MoM, while average hourly earnings rose 3.2% from a year earlier, accelerating at a slightly slower pace than in February. These numbers were welcomed by equities traders, as lessening inflationary pressures indicate the Fed will maintain its on-hold stance are not enough to build the case for a rate cut.
Germany will open the European macroeconomic calendar Monday by releasing February trade data. The trade surplus is expected to shrink to €17.B, with exports seen flat and imports up by just 0.1%. The US will release February Factory Orders, foreseen down by 0.6%.
The EUR/USD pair heads into the week with a bearish tone and poised to break below the yearly low of 1.1175 unless it manages to recover past 1.1285, the 38.2% retracement of the mentioned decline, in which case, the upward corrective movement could extend up to the 1.1330/50 price zone. Nevertheless, the daily chart shows that the pair is below all of its moving averages, with the 20 SMA converging with the mentioned 38.2% retracement, and technical indicators maintaining their bearish slopes well into negative ground. For the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, as the 100 SMA stands in the 1.1280 price zone and reinforcing the static resistance level. The 20 SMA lacks directional strength a handful of pips above the current level, while technical indicators pared their declines, but remain within negative ground.
Support levels: 1.1175 1.1130 1.1085
Resistance levels: 1.1245 1.1285 1.1330
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