EUR/USD Forecast: US Dollar buyers fight back

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0895

Financial markets keep moving on sentiment related to central banks’ announcements.
United States Initial Jobless Claims resulted better than anticipated at 233K.
EUR/USD turns bearish in the near term, aims to extend its slide.

The EUR/USD pair trades around its daily opening in the 1.0920 price zone, showing little directional aims throughout the day. The US Dollar finds modest demand ahead of Wall Street’s opening, as the market sentiment deteriorated following the poor performance of United States (US) indexes on Wednesday. Asian and European shares edged lower, weighing on US futures

Overall, financial markets remain cautious amid increased uncertainty about upcoming central banks’ monetary policy decisions. Tepid macroeconomic data and shifts in policymakers’ tone fueled concerns and resulted in panic-related movements.

The Eurozone did not publish relevant data, while the US just released Initial Jobless Claims for the week ended August 2, which decreased to 233K from a previously revised 250K, also beating expectations of 240K.

EUR/USD short-term technical outlook

The EUR/USD pair fell following the release of US employment-related data and pierces the 1.0900 mark. The daily chart shows it’s down for a third consecutive day and that technical indicators turned south, in line with the increased selling pressure. At the same time, the pair trades above all its moving averages, although the 20 Simple Moving Average (SMA) has lost its upward strength and turned flat at around 1.0870. The case for a steeper decline seems limited, albeit a break through 1.0890, the immediate support level, could exacerbate the decline.

In the near term, and according to the 4-hour chart, the risk skews to the downside. EUR/USD retreated sharply after repeatedly meeting sellers around a flat 20 SMA, somehow suggesting buyers capitulate. Technical indicators, in the meantime, head firmly south within negative levels, supporting another leg lower.

Support levels: 1.0890 1.0845 1.0800

Resistance levels: 1.0950 1.1005 1.1045

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

Bitcoin price extends losses, and trades below the lower consolidating boundary at $67,300 at the time of writing. A firm close below this level could trigger a deeper correction for BTC. Despite the weakness in price action, institutional demand shows signs of support, recording mild inflows in ETFs so far this week.