- EUR/USD is on the defensive below the 100-day average.
- With oil regaining poise, treasury yields are looking to resume the post-US ISM PMI rise.
- The uptick in US yields will likely keep the pair under pressure.
EUR/USD is currently trading below the 100-day moving average at 1.1068, having faced rejection near 1.11 on Tuesday.
The American dollar found bids during the North American session after the US ISM Manufacturing Purchasing Managers' Index bettered expectations with a score of 50.9 in January. That was the first above-50 reading in six months.
EUR/USD, therefore, fell to 1.1035 before regaining some poise to end the day at 1.1059. The minor recovery happened as oil cracked support at $50, pushing treasury yields lower.
The sell-off in WTI, however, ran out of steam in Asia, and the black gold is now trading well above $50, representing a 1.2% gain on the day.
With oil regaining the $50 handle, the treasury yields may resume the post-ISM PMI rise, helping the US dollar score gains against the EUR and other majors.
At press time, the US 10-year yield is trading at 1.54%, representing a three basis points rise from the low of 1.51% observed in early Asia.
On the data front, Eurozone Producer Price Index for December is scheduled for release at 10:00 GMT. In the US docket, Factory Orders for December will take center stage.
Technical setup
The pair is still trapped in a falling channel represented by trendlines connecting Dec. 31 and Jan. 16 highs and Jan. 10 and Jan. 28 lows. A daily close above 1.1095 is needed to confirm a breakout. That would create room for a rally to the Jan. 16 high of 1.1173.
On the other hand, acceptance under Monday's low of 1.1035 would bring additional losses toward the Nov.29 low of 1.0981. A close lower would see sellers target the 2019 low of 1.0879.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds near 1.1100, looks to post small weekly gains
EUR/USD trades near 1.1100 in the American session on Friday. Although the risk-averse market atmosphere caps the pair's upside, dovish comments from Fed officials and the disappointing US jobs report help it hold its ground.
GBP/USD retreats to 1.3150 area after post-NFP spike
GBP/USD turns south and declines to 1.3150 area after spiking to 1.3240 in the early American session. The negative shift seen in risk mood following the US labor market data for August helps the US Dollar stay resilient against its peers and weighs on the pair.
Gold pulls away from near record highs, holds above $2,500
Gold came within a touching distance of a new all-time high near $2,530 as US Treasury bond yields turned south on disappointing US jobs data. The US Dollar's resilience amid a souring risk mood, however, caused XAU/USD to erase its daily gains.
Crypto today: Bitcoin, Ethereum, XRP tests key support, TRON network non-stablecoin activity hits new highs
Bitcoin, Ethereum, and XRP hover around key support levels after registering a steep correction earlier this week. TRON network’s stablecoin activity hit new highs following the release of SunPump.
Nonfarm Payrolls expected to show modest hiring rebound in August after July’s tepid report
The Nonfarm Payrolls report is forecast to show that the US economy added 160,000 jobs in August, after creating 114,000 in July. The Unemployment Rate is likely to dip to 4.2% in the same period from July’s 4.3% reading.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.