EUR/USD Consolidating Gains above 1.2400, Dollar Advances Post NFP05 February, 2018 by Aayush Jindal in Market Analysis
- The Euro seems to be struggling to move above 1.2500 against the US Dollar.
- There is a major bullish trend line forming with support at 1.2400 on the 4-hours chart of EUR/USD.
- The US nonfarm payrolls increased 200K in Jan 2018, more than the forecast of 180K.
- Today, the Euro Zone Services PMI for Jan 2018 will be released, which is forecasted to remain at 57.6.
EURUSD Technical Analysis
The Euro remained in a bullish trend this past week and settled above 1.2400 against the US Dollar. The EUR/USD pair is currently consolidating, with resistances on the upside at 1.2510 and 1.2520.
This past week, there was an upside break above 1.2400 in EUR/USD and the pair traded above 1.2500. A new year high was formed at 1.2520 from where a short-term correction was initiated. Recently, the pair broke the 50% Fib retracement level of the last wave from the 1.2336 low to 1.2520 high.
However, the current price action is positive as long as the pair is above 1.2400 and 1.2380. There is also a major bullish trend line forming with support at 1.2400 on the 4-hours chart.
An intermediate support is near the 61.8% Fib retracement level of the last wave from the 1.2336 low to 1.2520 high at 1.2406. On the upside, there is a connecting bearish trend line forming with resistance at 1.2510.
A break above the 1.2510 level and the 1.2520 high could open the doors for more gains. On the flip side, a daily close below 1.2400 may ignite an extended downside move in EUR/USD.
This past Friday, the US saw January’s nonfarm payrolls report by the US Department of Labor. The market was looking for an increase of 180K, more than the last 148K.
However, the actual result was better since the US NFP came in at 200K. Moreover, the last reading was revised up from 148K to 160K. The report stated:
Employment continued to trend up in construction, food services and drinking places, health care, and manufacturing. In January, the unemployment rate was 4.1 percent for the fourth consecutive month. The number of unemployed persons, at 6.7 million, changed little over the month.
Overall, the report was positive and helped the greenback. The USD/JPY pair climbed higher and closed the week above the 110.00 level. On the other hand, GBP/USD declined and corrected toward the 1.4080-1.4100 levels.