Share:
  • The US Dollar slides across the board after the FOMC meeting and US data; attention turns to NFP.
  • Despite the current slide, fundamentals still favor the Dollar.
  • EUR/USD is testing a key resistance area; a break above 1.0670 could open the door to 1.0700.

The EUR/USD rose on Thursday boosted by a weaker US Dollar, but it could not break a key resistance level and lost strength. After the FOMC meeting and US economic data, market focus turns to the Nonfarm Payrolls report.

Data from the US on Thursday showed a softening labor market and a decline in the Unit Labor Cost index during the third quarter. These figures reinforce the perception that the Federal Reserve (Fed) has finished raising interest rates. This expectation has led to a decline in Treasury yields and boosted equity prices on Wall Street.

On Friday, the US will report the official employment report. The expectation is for an increase in payrolls by 180,000. Such a figure would suggest a healthy, balanced labor market. However, it would not change the expectation that the Fed is done with rate hikes. It would take another significant positive surprise to put the odds of another rate hike back on the table. A number reinforcing the "larger for longer" mantra could support the Dollar.

The current upward move in EUR/USD is occurring within a gradual correction, as the fundamentals still favor the US over the Euro area. If market sentiment deteriorates, bears will likely regain control.

EUR/USD short-term technical outlook

On the daily chart, the pair is on the verge of posting its second-highest daily close in over a month, above 1.0600. However, the upside remains limited by the 55-day Simple Moving Average (SMA), which stands at 1.0664. A daily close above this level would strengthen the outlook for the Euro, while staying below that area suggests that further gains may be limited. On the downside, a daily close below 1.0506 could indicate that the correction is over, favoring consolidation ahead with a downside bias.

On the 4-hour chart, technical indicators show the Euro losing strength, with the Relative Strength Index (RSI) flattening and Momentum turning south. While above 1.0590, the pair could rise to test the critical downtrend line at 1.0665. However, a decline below this level would open the door to more losses, with a target of 1.0560. The 1.0520 zone is the vital support level.

View Live Chart for the EUR/USD

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

AUD/USD prints slight gains post-FOMC minutes, mixed Aussie PMIs

AUD/USD prints slight gains post-FOMC minutes, mixed Aussie PMIs

The Australian Dollar posted minuscule gains on Wednesday against the US Dollar, after the release of the Federal Reserve’s January meeting minutes emphasized policymakers remain hesitant to begin to ease policy. Therefore, the pair exchanges hands at 0.6550, down by 0.02% as the Asian session begins.

AUD/USD News

EUR/USD drifts into Wednesday's top end after Fed Minutes, markets pivot to PMI wait

EUR/USD drifts into Wednesday's top end after Fed Minutes, markets pivot to PMI wait

EUR/USD drifted into the midrange before a late break into the high side on Wednesday after the US Federal Reserve (Fed) published its latest Minutes which showed policymakers continue to remain focused on downside risks.

EUR/USD News

Gold price hovers around the 50-day SMA as traders eye flash PMIs

Gold price hovers around the 50-day SMA as traders eye flash PMIs

Gold price is virtually unchanged after the US Federal Reserve released January’s meeting minutes, which reassured market participants that the Fed is in no rush to cut rates in the near term.  The XAU/USD trades within the $2020-30 range.

Gold News

Bitcoin price likely to fall but MicroStrategy’s $12 billion market cap makes it a possible S&P 500 candidate

Bitcoin price likely to fall but MicroStrategy’s $12 billion market cap makes it a possible S&P 500 candidate

Bitcoin price consolidation continues to stretch but steadily leans in favor of the downside. This is expected as markets tend to not wait that long. Meanwhile, Michael Saylor’s firm MicroStrategy is making headlines with a possible listing in the S&P 500.

Read more

Nvidia Stock Earnings: NVDA Q4 results trounce consensus

Nvidia Stock Earnings: NVDA Q4 results trounce consensus

Nvidia beat earnings consensus from Wall Street by a large margin on Wednesday, and the stock jumped more than 3% afterhours. Consensus had been $4.64 in adjusted EPS for the quarter ending in December, but Nvidia posted $5.16.

Read more

Majors

Cryptocurrencies

Signatures