- The EUR/USD has failed twice in the last 14 hours to cut through the 50-hour exponential moving average (EMA).
- The treasury sell-off could gather more steam, sending the EUR/USD lower if the US wage growth numbers beat estimates by a big margin.
For the EUR/USD traders, the 50-hour exponential moving average (EMA), currently located at 1.1518, is a key level to watch out for in Europe.
This is because the recovery from the low of 1.1463 hit yesterday seems to have run out of steam around the EMA. That argument has merit as the pair has failed twice in the last 14 hours to cross the 50-hour EMA in a convincing manner.
The rejection at the 50-hour EMA may prove costly in Europe if the treasury yields resume the rally, although caution ahead of the US non-farm payrolls and wage growth release could keep the 10-year flatlined. At press time, the 10-year US Treasury yield is trading at 3.19 percent, having clocked a high of 3.23 percent yesterday.
Later today, the EUR/USD may print fresh 1.5-month lows below 1.1463 if the US wage growth number blows past expectations, lifting the 10-year yield above the previous day's high of 3.23 percent. It is worth noting that the bar of expectations has been set high and the doji candle on the 10-year treasury yield's daily chart is reporting indecision or bullish exhaustion.
As a result, anything less than 0.3 percent and 185K, the official economists’ expectation for average weekly earnings and non-farm payrolls, respectively, could trigger a sharp drop in the yields and the US dollar.
EUR/USD Technical Levels
Resistance: 1.1518 (50-hour EMA), 1.1543 (previous day's high), 1.1594 (resistance on the hourly chart)
Support: 1.1493 (recent higher low on the hourly chart), 1.1463 (previous day's low), 1.1422 (76.4% Fib R of 1.1301/1.1815)
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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.