EUR/USD Forecast: Bears in the drivers’ seat ahead of US employment data

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1108

The US will release the December Nonfarm Payroll report this Friday.
The market’s mood remained upbeat amid ebbing Middle-East tensions.
EUR/USD struggling with the 1.1100 level, bearish in the short-term.

The greenback continued to appreciate Thursday, resulting in the EUR/USD pair losing the 1.1100 level for the first in two weeks. The shared currency attempted to recover some ground during London trading hours, helped by mostly encouraging German data, although the pair resumed its decline with Wall Street’s opening with the American dollar reaching fresh daily highs against most major rivals. Ebbing concerns about the conflict in the Middle-East was the reason behind the dollar’s gains.

Germany released the November Current Account, which was up by €24.9B, while Industrial Production in the same month, rose by 1.1% when compared to October. The yearly reading declined by 2.6%, better than the -3.8% forecasted. The Trade Balance surplus, however, declined to €18.3B, missing the market’s expectations. The US released initial jobless claims for the week ended January 3 which came in at 214K beating the 220K expected.

This Friday, the US will release December employment data. The country is expected to have added 164K new jobs, after gaining 226K positions in November. The unemployment rate is seen unchanged at 3.5%, as well as the participation rate foreseen at 63.2%. Average Hourly Earnings are seen up by 0.3% MoM and by 3.1% YoY, pretty much unchanged when compared to the previous month.

EUR/USD short-term technical outlook

The EUR/USD pair is trading below the 61.8% retracement of its latest daily advance at around 1.1135, with bears on the drivers’ seat as long as the price remains below this level. The short-term picture is bearish, as, in the 4-hour chart, the pair continued developing below its 20 and 100 SMA, while now battling the 200 SMA. Technical indicators hold within negative levels and close to oversold readings, reflecting sellers’ dominance.

Support levels: 1.1095 1.1065 1.1020

Resistance levels: 1.1135 1.1160 1.1200

View Live Chart for the EUR/USD

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.

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