EUR/USD Forecast: At yearly lows ahead of NFP release
EUR/USD Current Price: 1.0972
- Dollar’s rally extended amid record highs in US equities.
- Worse than expected German data weighed on the shared currency.
- EUR/USD technically bearish, poised to rested 2019 low at 1.0878.
The EUR/USD pair has fallen to 1.0964 this Thursday, a level that was last seen in October 2019. The dollar has continued to strengthen against most major rivals on the back of local equities, with US indexes reaching all-time highs. The shared currency, in the meantime, suffered from another batch of disappointing data, as German Factory Orders fell in December by 2.1% MoM and by 8.7% YoY, much worse than anticipated.
The dollar rallied despite mixed US employment-related data, as Challenger Job Cuts in January were up to 67.735K, quite a disappointment. However, Initial Jobless Claims for the week ended January 31 decreased to 202K, much better than the 215K anticipated. Nonfarm Productivity in Q4 increased by 1.4%, while the Unit Labor Cost in the same period rose by 1.4%, down from 2.5% in the previous quarter.
The figures are relevant ahead of the Nonfarm Payroll report to be out this Friday. The US economy is expected to have added 160K new jobs in January, while the unemployment rate is foreseen stable at 3.5%. Average hourly earnings are expected to have bounced, forecasted to result at 0.3% MoM and 3.0% YoY.
EUR/USD short-term technical outlook
The EUR/USD pair is developing near the mentioned low, heading into the Asian session with a firmly bearish tone, although oversold. The 4-hour chart shows that technical indicators turned south within oversold levels, while the price develops well below all of its moving averages, supporting additional declines. A corrective recovery could take place should the pair recover above 1.1020, quite unlikely at the time being. Below 1.0950, on the other hand, the pair has room to retest 2019 low at 1.0878.
Support levels: 1.0950 1.0910 1.0875
Resistance levels: 1.1020 1.1060 1.1100
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
