- EUR/USD has gone into a consolidation phase below 1.0800.
- US Dollar preserves its strength following the NFP-inspired rally.
- 1.0760 aligns as key near-term technical support for the pair.
Following the sharp decline witnessed in the second half of the previous week, EUR/USD seems to have gone into a consolidation phase slightly below 1.0800 early Monday. The pair's near-term technical outlook points to a bearish tilt and 1.0760 aligns as critical support.
The impressive January jobs report from the US revealed on Friday and Nonfarm Payrolls rose by 571,000. This reading beat the market expectation of 185,000 by a wide margin and provided a boost to the US Dollar. Further details of the publication revealed that the annual wage inflation, as measured by Average Hourly Earnings, declined to 4.4%. However, December's print of 4.6% got revised higher to 4.9%, not allowing the soft wage inflation reading for January to have a negative impact on the US Dollar's valuation.
Early Monday, US stock index futures trade in negative territory. In the absence of high-impact data releases, the US Dollar could preserve its strength against its rivals in case Wall Street's main indexes continue to push lower after the opening bell.
The European economic docket will feature Retail Sales data for January, which is forecast to show a 2.5% decline on a monthly basis. Earlier in the session, the data from Germany showed that Factory Orders rose by 3.2% in December, compared to analysts' estimate of 2%, but failed to help the Euro gain its footing.
Finally, European Central Bank President Christine Lagarde will be delivering a speech at 1800 GMT. If Lagarde reminds markets that they are unlikely to end the tightening cycle after one more 50 basis points increase in key rates in March, EUR/USD's losses could remain limited.
EUR/USD Technical Analysis
The Relative Strength Index on the four-hour chart stays well below 40, suggesting that there is some room on the downside before EUR/USD turns technically oversold.
On the downside, 1.0760 (200-period Simple Moving Average (SMA), Fibonacci 50% retracement of the latest uptrend) aligns as key support. In case EUR/USD falls below that level and starts using it as resistance, it could push lower toward 1.0730 (static level) and 1.0700 (psychological level, Fibonacci 61.8% retracement).
Interim resistance aligns at 1.0800 (psychological level, static level) before 1.0820 (Fibonacci 38.2% retracement). A four-hour close below the latter could discourage sellers and open the door for a recovery toward 1.0860, where the 100-period SMA is located.
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
AUD/USD gathers strength above 0.6400 amid optimism in US-China trade talks
AUD/USD edges higher to around 0.6420 during the early Asian session on Monday. Optimism in US-China trade negotiations in Geneva, Switzerland, boosts the Australian Dollar against the Greenback. Traders will keep an eye on positive developments that could support the China-proxy Aussie.
USD/JPY rises to over one-month high on US-China trade deal optimism
USD/JPY touches over a one-month high at the start of a new week in reaction to a US-China trade deal. Meanwhile, trade optimism helps ease concerns about a recession in the US. Moreover, the Fed's hawkish pause provides a goodish lift to the USD and further supports the currency pair.
Gold tumbles below $3,300 on progress in US-China trade talks
Gold price attracts some sellers to near $3,275 during the early Asian session on Monday, pressured by a stronger US Dollar. Optimism in US-China trade talks in Geneva, Switzerland, over the weekend has dragged the precious metal lower.
Week ahead: All eyes on US CPI and trade talks amid no end to tariff uncertainty
US CPI report takes centre stage to gauge tariff impact. Progress in trade negotiations will also be watched, especially with China. US Retail Sales, UK and Japanese GDP on the agenda too.
Why the UK-US trade deal won’t herald a wider tariff climbdown
For Britain, the UK-US deal secures lower tariffs without compromising forthcoming UK-EU talks. And for the US, it signals to investors that the administration is prepared to be flexible on tariffs. But we're sceptical that the deal will translate into a much wider de-escalation in US tariff policy.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.