EUR/USD stays cautious near 1.1100 ahead of Payrolls

EUR/USD trades within a tight range around 1.1100.
The 55-day SMA NEAR 1.1090 acts as key support.
US Non-farm Payrolls expected to rule the sentiment later.

Pablo Piovano FXStreet

The solid weekly performance of the greenback keeps the downside pressure intact on the riskier assets, taking EUR/USD to the 1.1100 neighbourhood so far, or yearly lows.

EUR/USD focused on US data

The pair has resumed the downside following Thursday’s inconclusive price action, opening the door to another potential test of the key 55-day SMA. It is worth mentioning that below this level the downside pressure should be reinstalled.

The correction lower from late December’s peaks near 1.1240 was exclusively on the back of the recovery in the buck in response to easing tensions on the geopolitical front, which still continue to be dominated by the US-Iran effervescence.

In the meantime, the pair is expected to keep the current sidelined theme ahead of the release of December’s Non-farm Payrolls across the pond (166K exp.) in an otherwise empty docket in the euro area.

What to look for around EUR

The pair seems to have met some decent contention in the vicinity of the key 55-day SMA in the 1.1090 area. The inability of the spot to surpass the area of recent tops beyond the 1.1200 handle – ideally in the short-term horizon - carries the potential to trigger some consolidation and eventually the resumption of the downside. In the meantime, markets’ attention remains on the US-Iran conflict while some cautiousness has recently emerged regarding the imminent sign of the US-China’s ‘Phase One’ deal (on January 13^th?). On the more macro view, the slowdown in the region remains far from abated and continues to justify the ‘looser for longer’ monetary stance from the ECB and the cautious/bearish view on the European currency in spite of the ongoing (temporary?) recovery.

EUR/USD levels to watch

At the moment, the pair is losing 0.08% at 1.1096 and a breakdown of 1.1092 (55-day SMA) would target 1.1066 (low Dec.20 2019) en route to 1.1063 (100-day SMA). On the flip side, the next up barrier aligns at 1.1139 (200-day SMA) seconded by 1.1186 (61.8% of the 2017-2018 rally) and finally 1.1199 (high Dec.13 2019).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Week ahead: US CPI, France’s budget crisis and Q3 earnings to set the market tone

The US dollar held relatively strong this week, despite the disappointing US jobs report on October 2, which further decreased the probability of a back-to-back rate hike by the Fed at the upcoming gathering on October 28.

CFTC Report: Euro and Aussie shorts expand amid diverging signals

The week in one sentence: Euro and Australian Dollar shorts deepened in the week to October 6, while Yen longs rebuilt. In addition, Coffee buying continued, and Gold exposure remained elevated despite another price decline. Speculators turned more negative on the Euro, increasing the net exposure to around 99.3K contracts.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?