EUR/USD Current Price: 1.1916
- US employment data surprised on the upside, as the country added 379K jobs in February.
- The US Senate passed the American Rescue Plan Act with some changes to the House’s bill.
- EUR/USD is trading near a critical mid-term support level and poised to break it.
The EUR/USD pair fell to 1.1892 on Friday, a fresh 2021 low, as an already strong American dollar got a boost from a surprise on the US employment side. The country published the Nonfarm Payroll report, which added 379K new jobs in February, much better than anticipated. The unemployment rate contracted to 6.2%, better than the 6.3% expected. The encouraging news also underpinned equities, while US Treasury yields reached fresh YTD peaks. The greenback maintained its strength heading into the weekly close, settling just above the 1.1900 threshold.
On Saturday, the US Senate passed the $1.9 trillion stimulus package, although some changes were introduced regarding the increase of the minimum wage to $15 per hour and the number of people who will qualify for a $1,400 stimulus payment. The final vote was 50-49, with all Democrats voting in favor of the bill and all Republicans voting against it. The bill, called American Rescue Plan Act, now moved back to the House, where it will be voted on Tuesday.
A stimulus injection usually boosts equities to the detriment of the greenback. However, the dollar may retain its strength on Monday, as the stimulus package has been mostly priced-in, while expectations of higher inflation will likely maintain government debt yields up. The US won’t publish macroeconomic data on Monday, while the EU will release the March Sentix Investor Confidence Index, foreseen at 1 from -0.2 in the previous month.
EUR/USD short-term technical outlook
The EUR/USD pair neared the 61.8% retracement of the November/January rally at 1.1885, the immediate support. In the daily chart, the pair is poised to extend its decline, as indicators maintain their downward slopes near oversold readings. The pair has failed to recover beyond a directionless 20 SMA and broke below its 100 SMA, now trading well below them. In the 4-hour chart, the 20 SMA heads firmly lower below the longer ones, all of them above the current level. Technical indicators bounced just modestly, holding on to extreme oversold levels.
Support levels: 1.1885 1.1840 1.1790
Resistance levels: 1.1970 1.2020 1.2060
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.