- EUR/USD gives up London gains, after piercing the 76.4 Fib of 1.1853-1.1508 and the 55-D SMA.
- Eyes on the downside, (Fed on track play), 1.1737 comes as the Daily Cloud Base.
EUR/USD gave up the pre-North America games falling below the 21-hr SMA at 1.760, where previously, EUR/USD has made a London session high of 1.1790. The single unit has scored a session low of 1.1740.
Initially, EUR/USD picked up a bid in the EZ Surprise Sentix rebounding at 12.1 in July beating the 8.2 consensuses and the prior 9.3. However, this still leaves the index at a low level and wasn't enough to sustain the break higher. The pair dropped back to the support of the 50-D SMA which has held so far at 1.1741. Germany also reported a slightly lower than expected trade surplus for May (EUR19.7bn), reflecting better (and better than expected) Eurozone economic data.
"Intraday, the EUR’s undertone has been supported by supportive comments from ECB’s Coeure who stated that the trade tensions which have emerged so far do not have the “potential to derail the recovery”," analysts at Scotiabank noted.
Nonfarm payrolls: Fed on track
In more recent trade, the euro has succumbed to broad dollar strength, as traders play the central bank divergence after a goldilocks nonfarm payrolls outcome on Friday, that did make for some initial profit taking in the dollar due to subdued wages.
"On the one hand, nonfarm payrolls posted a decent 213k rise in June, above market expectations, and has averaged a healthy 211k per month in Q2. On the other, the unemployment rate surprisingly rose to 4% last month, from 3.8% in April, driven by an expanding labour force. Wage growth remains sluggish. Witness a softening in average hourly earnings to 2.7%yoy in June versus 2.8%yoy in May. Still, the Fed looks set to continued its gradual tightening stance in coming months, judging by June’s hawkish FOMC minutes." - analysts at RBS Economics explained.
Meanwhile, from a technical perspective, EUR/USD set a new short-term high after piercing the 76.4 Fib of 1.1853-1.1508 and the 55-D SMA. However, the pair has been faded at the highs is has moved to a flat position for the day within the wider 1.1500-1.1850/60 range. The first upside technical level of significance comes as 1.1772/1.1775, (55-Day MA / 76.4% Fibo 1.1853-1.1508). Then, 1.1817 is the 30-Day Upper Bollinger. To the downside, 1.1737 is the Daily Cloud Base, 1.1681is the Daily Low Jul 6, 1.1659 as the 10-Day MA and 1.1656 as the 21-Day MA.
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.