EUR/USD Could Struggle Near 1.2100, Oil Climbed Further

Key Highlights

  • EUR/USD extended its decline below 1.2000 and tested 1.1950.
  • A key bearish trend line is forming with resistance near 1.2100 on the 4-hours chart.
  • GBP/USD remained well bid and climbed above 1.3700, oil price gained momentum above $55.00.
  • The US nonfarm payrolls increased 49K in Jan 2021, and the unemployment rate declined to 6.3%.

 

EUR/USD Technical Analysis

After forming a short-term top near 1.2150, the Euro started a fresh decline against the US Dollar. EUR/USD broke the 1.2020 and 1.2000 support levels.

Looking at the 4-hours chart, the pair traded close to the 1.1950 level and formed a low at 1.1951. Recently, there was an upside correction above the 1.2000 level. The pair tested the 50% Fib retracement level of the recent decline from the 1.2156 high to 1.1951 low.

On the upside, there is a strong resistance forming near 1.2100 and the 100 simple moving average (red, 4-hours). There is also a key bearish trend line forming with resistance near 1.2100 on the same chart.

A clear break above the trend line resistance could lead EUR/USD towards the 1.2150 resistance or the 200 simple moving average (green, 4-hours). Any more gains might call for a test of the 1.2200 barrier. If there is a fresh decline, the pair could revisit the 1.1950 support.

Fundamentally, the US nonfarm payrolls report for Jan 2021 was released by the US Bureau of Labor Statistics. The market was looking for a rise in jobs by 50K.

The actual result was close to the forecast, as the US NPF increased 49K. The last reading was revised from -140K to -227K. Besides, the US Unemployment Rate decline from 6.7% to 6.3%.

The report added:

In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.

Overall, EUR/USD is likely to face hurdles near 1.2100. Conversely, GBP/USD remains elevated and it could aim a break above the 1.3750 resistance zone.

Economic Releases

  • Germany’s Industrial Production Dec 2020 (MoM) - Forecast +0.3%, versus +0.9% previous.