EUR/USD Forecast: Corrective decline set to continue

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.2226

The dollar firmed up despite a terrible US Nonfarm Payroll report.
Equities and government debt yields advance on hopes for further fiscal stimulus.
EUR/USD is at risk of extending its decline over the upcoming sessions.

The EUR/USD pair closed the week with modest losses, as the greenback extended its advance on Friday. The pair settled above the 1.2200 level, with the greenback strengthening despite terrible US employment figures. The country released the December Nonfarm Payroll report, which showed that the country lost 140K job positions in December. The unemployment rate remained steady at 6.7%, better than the 6.8% anticipated.

Equities closed with gains, and US Treasury yields kept advancing, as markets rallied on hopes for additional stimulus. On Friday, President-elect Joe Biden called for immediate further fiscal support, including increased direct payments of $ 2,000. The pandemic has brutally spread across the US, reporting over 300K daily new cases in one day by the end of the week.

This Monday, the EU will publish January Sentix Investor Confidence, foreseen at 0 from -2.7 in the previous month. The US won’t release relevant macroeconomic figures.

EUR/USD short-term technical outlook

The EUR/USD pair has fallen for a second consecutive day, but the daily chart shows that the price is hovering around a bullish 20 SMA, and far above the larger ones, somehow suggesting that the latest decline is corrective. Technical indicators head firmly lower, the Momentum crossing its midline and the RSI around 54, indicating that the decline may continue. The risk is skewed to the downside in the 4-hour chart, as technical indicators hold at recent lows near oversold readings, as the pair develops below its 100 SMA for the first time since early November.

Support levels: 1.2190 1.2140 1.2100

Resistance levels: 1.2230 1.2285 1.2340

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.