Forex »EUR / USD stabilizes around 1.1350

EUR / USD stable at around 1.1350 after mixed US non-farm payrolls report

After a mixed-to-expected US employment report weakened the US dollar in forex, the euro rose for a second consecutive day this week. During the New York session, the EUR / USD was trading at 1.1346 at the time of writing.

  • The NFP report disappointed, but the unemployment rate improved.
  • Inflation in the euro area has reached the 5% threshold, above estimates.
  • Technical Outlook EUR / USD: The 1-hour chart shows a bullish bias, although a break above 1.1400 increases the opportunity for a push towards the SMA-100 moving average at 1.1500.

Market sentiment is out of risk as European equity indices close red, while US indices lose, with the exception of Dow Jones Industrial (DJI) up 0.34%. In addition, the 10-year US Treasury yield hit a year-to-date high of around 1.801%, failing to raise the greenback in forex, with the US dollar index down 0.56% to 95. 78.

US employment figures are mixed as Eurozone inflation hit the 5% mark.

Earlier in the North American session, the Bureau of Labor Statistics (BLS) released the US Nonfarm Payrolls (NFP) report for December. The numbers were weaker than expected, with the US economy adding 199,000 jobs, less than the 400,000 analysts predicted. However, the unemployment rate improved from 4.1% to 3.9%, hitting a 22-month low.

The December report is unlikely to reflect the impact of the fourth wave of Covid-19, linked to the Omicron variant. The survey was conducted in mid-December, just as the newly discovered strain hit the United States.

Meanwhile, the euro zone economic fact sheet included inflation data. The December HICP Flash year-on-year increased 5.0%, higher than the 4.7% analysts estimate. The increase in the figure is attributable to high energy prices, up 26% compared to 2021. However, increases in food, services and imported goods were also above the European Central Bank’s 2% target. .

Technical perspectives

With macroeconomic data from the Eurozone and the United States in the rearview mirror, the pair EUR / USD stabilized in forex around the 50-day moving average at 1.1352. Given that the Relative Strength Index (RSI) is at 53 in bullish territory, the pair may have an advantage, but should face strong resistance around December 31, 2021, with a daily high at 1.1386. A decisive breakout of this supply zone would send the price of the EUR / USD towards 1.1400.

EUR / USD 30-minute chart

On the other hand, the first support for the EUR / USD pair is the Jan 5th high at 1.1346. A break of the latter exposes the R1 daily pivot at 1.1325, immediately followed by a solid support zone where ALL the simple hourly moving averages (SMA) converge with the daily pivot point around the 1.1308-16 region.

Par Christian Borjon Valencia, FXStreet

Christian Borjon, Forex News Editor at FX Street, has been an experienced Forex and CFD commodity trader for six years. He worked for a year and a half at CITI Banamex (CITI branch in Mexico) as a Forex Market Maker. Christian holds a BA in Business Administration from UA de C, Mexico. Like many other traders, he started taking a course and learning the hard way. Later, Christian discovered this and became obsessed with fundamental analysis and macroeconomics and his influence on the financial markets.

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The views expressed herein are those of the author only and do not necessarily reflect the views of Forex Quebec. Every investment and trading move carries risk, you should do your research when making a decision.

Disclaimer: The information and opinions contained in this report are provided for general information purposes only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts or CFDs. Although the information contained herein comes from sources believed to be reliable, the author does not guarantee its accuracy or completeness and assumes no responsibility for any direct, indirect or consequential damages that may arise from anyone who relies on such information.

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