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Can EUR/USD Recover Above 1.2370?

Aayush Jindal

Aayush Jindal

Key Highlights

  • The Euro declined after trading towards the 1.2450 resistance against the US Dollar.
  • There is a key connecting bearish trend line forming with resistance at 1.2400 on the 4-hours chart of EUR/USD.
  • The US nonfarm payrolls figure posted a solid rise of 313K in Feb 2018, more than the forecast of 200K.
  • Today, the US monthly budget for Feb 2018 will be released, which is forecasted to post $-222.6B.

EURUSD Technical Analysis

The Euro traded higher this past week above the 1.2400 level against the US Dollar. However, the EUR/USD pair could not move above 1.2450 and started a downside move.The pair made a double top pattern near the 1.2445 level and declined. It moved below the 38.2% Fib retracement level of the last wave from the 1.2151 low to 1.2446 high.EURUSD Technical Analysis Euro US DollarMore importantly, there was a close below the 1.2400 support and the 100 simple moving average (red, 4-hour). The pair remains under a bearish pressure and it could decline further towards 1.2250.A major support is near the 61.8% Fib retracement level of the last wave from the 1.2151 low to 1.2446 high. Below 1.2260 and 1.2250, the pair may retest the 1.2200 support.On the upside, there is a key connecting bearish trend line forming with resistance at 1.2400 on the 4-hours chart. A break above the trend line resistance is needed for the pair to move back towards 1.2450.This past Friday, the US nonfarm payrolls report for Feb 2018 was released by the US Department of Labor. The market was looking for a rise of 200K, similar to the last reading.However, the actual result was better as there was a rise of 313K. The last reading was also revised up from 200K to 239K. Moreover, the unemployment rate remained stable at 4.1%.The report added:

Among the major worker groups, the unemployment rate for Blacks declined to 6.9 percent in February, while the jobless rates for adult men (3.7 percent), adult women (3.8 percent), teenagers (14.4percent), Whites (3.7 percent), Asians (2.9 percent), and Hispanics (4.9 percent) showed little change.

US NFP Feb 2018The overall sentiment is positive for the US Dollar, which is why the EUR/USD pair may remain in a bearish trend.

Economic Releases to Watch Today

  • US Monthly Budget for Feb 2018 - Forecast $-222.6B, versus $49.0B previous.