EUR/USD: wages give dollar a breathe

EUR/USD Current Price: 1.1148

Majors remained static for most of the first half of the day, as investors waited for the US employment data. The January Nonfarm Payroll report rocked the market, as the US economy added just 151K new jobs in the month, although the unemployment rate fell to 4.9%, the lowest in 8 years. Wages came out as a big surprise, rising well above expected, up 0.5% monthly basis, while compared to a year before, it remained at 2.5%. The initial market reaction was a rally against the greenback, with the EUR/USD pair running up to 1.1245 that was quickly faded. The dollar began grinding higher after the dust began to settle, as higher wages are good to boost inflation.

The EUR/USD pair is short term bearish according to the 1 hour chart, heading towards the 1.1120 immediate support as the technical indicators accelerated their declines below their mid-lines and the price is being contained by its 20 SMA. In the 4 hours chart, the technical indicators are finally correcting overbought readings, while the 20 SMA maintains a strong bullish slope around 1.1060, providing support in the case of further declines.

Support levels: 1.1120 1.1060 1.1025

Resistance levels: 1.1160 1.1200 1.1240

GBP/USD Current price: 1.4462

View Live Chart for the GBP/USD

The Pound is today the weakest across the board, falling down to 1.4451 against the greenback after the US NFP release. The GBP/USD began its decline after a poll from You Gov showed an increase in the ones favoring a Brexit, up to 45% of the voters. The pair has bounced some from the level, but maintains a short term bearish tone, as in the 1 hour chart, the price is below a bearish 20 SMA, while technical indicators head south within bearish territory. In the 4 hours chart, the price has broken below its 20 SMA and 200 EMA, while the technical indicators head south, with the RSI already entering bearish territory, increasing chances of a downward continuation.

Support levels: 1.4430 1.4380 1.4350

Resistance levels: 1.4510 1.4550 1.4590

USD/JPY Current price: 117.38

View Live Chart for the USD/JPY

Limited correction, sell on spikes. The USD/JPY pair gains some ground after the release of a mixed US employment report, showing a strong rise in wages during January, and the lowest unemployment rate in eight years. Nevertheless, and with the market dollar-negative, the rally seems quite shy, and mostly a correction. Technically, the 1 hour chart shows that the technical indicators are bouncing higher within positive territory, while the 100 SMA extends further its decline and crosses below the 200 SMA above the current level. In the 4 hours chart, the technical indicators are posting tepid recoveries from oversold territory, but lack upward strength, while the price is also far below its moving averages, supporting the ongoing advance is barely corrective. Further rises are likely to be seen as selling opportunities, up to the 118.10 region.

Support levels: 117.00 116.60 116.20

Resistance levels: 117.70 118.10 118.50

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