FXStreet (Mumbai) – The EUR/USD caught a bid wave earlier this week, courtesy of which the pair is up more than 350 pips from the weekly low. The immediate focus now is on the all important US non-farm payrolls figure for January.
USD under pressure
After a long time the greenback is heading into the payrolls release on a weaker footing. The offered tone around USD gathered pace earlier this week after Fed’s Dudley expressed concern regarding the negative effect of the global downturn on US economy. Furthermore, markets do not see the Fed moving rates higher in 2016.
Overall, the picture is quite gloomy for the USD bulls. Hence, a weaker-than-expected figure could help the EUR extend bullish move. The momentum could receive an additional boost if the equity markets react negatively to the decreased of the Fed rate hike following a weaker-than-expected payrolls figure.
Meanwhile, a positive surprise could turn out to be a reason for profit taking on EUR longs ahead of the weekend. Apart from the headline number, the unemployment rate and average weekly earnings could play their part as well in determining the dollar movement. However, the main focus would undoubtedly be on the headline figure.
EUR/USD Technical Levels
The spot is sitting just below 1.12 levels. The immediate resistance is seen at 1.1236 (38.2% of Mar low-Aug high) ahead of the major hurdle at 1.1293 (23.6% of May 2014 high-Mar 2015 low). A break higher could be seen if the NFP is horribly weak and the equities react negatively. The spot could aim higher to 1.14 levels in such case. On the other hand, a break below 1.1132 (hourly 50-MA) could bring next support at 1.1055 (200-DMA) in play. A break lower would expose 100-DMA at 1.0966.
(Market News Provided by FXstreet)
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