EUR/USD: Bulls firming, eyes on M-formation neckline before 1.1410 break

EUR/USD is pressured in the opening session as the US dollar remains firm, with eye son US CPI.
A risk-off environment could be a weight for the euro at the start of the week.

Ross J Burland FXStreet

EUR/USD is under pressure in the opening session this week, with China returning from holiday's and digesting another bumpy ride on Wall Street on Friday due to upbeat economic data in the form of Nonfarm Payrolls surprises. The US dollar, as measured by the DXY index, is trading at 95.555 and near flat on the day but the euro is heavy and losing some 0.1% at the time of writing.

The greenback is consolidating Friday's price action where it rallied from a two-week low after the Nonfarm Payrolls data showed that the world's largest economy had created far more jobs than expected. The data showed that Payrolls grew 467,000 jobs last month and data for December was revised higher to show 510,000 jobs created instead of the previously reported 199,000. Reuters had forecast 150,000 jobs added in January while estimates ranged from a decrease of 400,000 to a gain of 385,000 jobs.

The case for Federal Reserve rate hikes was cemented This led to gold prices falling under pressure from a firmer dollar and higher US Treasury yields.

Looking ahead, analysts at ANZ Bank commented in a note and explained that ''January Consumer Price Index data this week are expected to show headline and core inflation remain elevated. Any sizable upward surprise would add to the case for the Fed starting off more aggressively.''

''Owing to very high energy prices and a broadening in underlying inflation pressures, the risks lie to the upside of the market’s 7.3% YoY forecast,'' analysts at TD Securities explained. ''Based on the inflation prints in other countries, a number in excess of 7.5% YoY is feasible.''

Meanwhile, there is a focus on Russian headlines from the weekend that could weigh on risk appetite and the euro as a consequence:

Risk-off and stronger US dollar is the opening theme

EUR/USD technical analysis

Meanwhile, EUR/USD is attempting to first in the lastest hour which leaves the neckline of the H1 M-formation vulnerable to a test. The bears will not be far behind, however, and eyes are on a break below 1.1410 for a run to 1.1330 for the sessions ahead.

EUR/USD H1 chart

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD pops to daily highs near 1.1430

EUR/USD starts the week on a positive note, climbing to as high as the 1.1430 zone, or daily tops, on Monday. The pair’s recovery comes in response to the broad-based US Dollar weakness, while investors continue to monitor developments from the Middle East ahead of the beginning of the ECB's annual forum.

Gold struggles to attract investors

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.