EUR/USD Could Struggle To Recover Above 1.130011 March, 2019 by Aayush Jindal in Market Analysis
- The Euro declined heavily and broke the 1.1250 support against the US Dollar.
- There was a break below a couple of important bullish trend lines on the 4-hours chart of EUR/USD.
- The US nonfarm payrolls in Feb 2019 came in at 20K, less than the 180K forecast.
- The US Retail Sales for Jan 2019 will be released today, which could increase 0.1% (MoM).
EURUSD Technical Analysis
The Euro failed to stay above the 1.1400 level and declined heavily against the US Dollar. The EUR/USD pair broke the 1.1300 and 1.1250 support levels to enter a bearish zone.
Looking at the 4-hours chart, the pair settled below the 1.1300 support level, the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours). Sellers gained traction and pushed the pair below the 1.1200 support.
A new monthly low was formed at 1.1176 before the pair started an upside correction. The pair moved above the 23.6% Fib retracement level of the last decline from the 1.1419 high to 1.1176 low.
However, there are many hurdles for buyers near the 1.1280 and 1.1300 levels. The key resistance could be 1.1300 since it coincides with the 50% Fib retracement level of the last decline from the 1.1419 high to 1.1176 low.
Therefore, if there is an upside correction, the pair is likely to face sellers near 1.1300 or the 100 simple moving average (red, 4-hours).
Fundamentally, the US nonfarm payrolls figure for Feb 2019 was released this past Friday. The market was looking for an increase of 180K, less than the last 304K.
The result was very disappointing as the US nonfarm payrolls came in at less than 50K at 20K. On the other hand, the last reading was revised up from 304K to 311K. On the positive side, the unemployment rate declined from the last reading of 4% to 3.8%.
The report added that:
The unemployment rate declined by 0.2 percentage point to 3.8 percent in February, and the number of unemployed persons decreased by 300,000 to 6.2 million. Among the unemployed, the number of job losers and persons who completed temporary jobs (including people on temporary layoff) declined by 225,000.
The result was negative and increased selling pressure on the US Dollar. However, downsides remain supported and upsides in EUR/USD and GBP/USD are likely to face sellers.
Economic Releases to Watch Today
- Germany’s Trade Balance for Jan 2019 – Forecast €21.0B, versus €19.4B previous.
- US Retail Sales Jan 2019 (MoM) – Forecast +0.2%, versus -1.2% previous.