Key Highlights
- EUR/USD declined heavily below the 1.1020 and 1.1000 support levels.
- A key bearish trend line is forming with resistance near 1.0970 on the 4-hours chart.
- The US nonfarm payrolls increased 225K in Jan 2020, more than the 160K forecast.
- The Euro Zone Sentix Investor Confidence could decline from 7.6 to 4 in Feb 2020.
EUR/USD Technical Analysis
This past week, the Euro started a strong decline below 1.1040 against the US Dollar. EUR/USD gained bearish momentum and broke many supports near 1.1020 and 1.1000.
Looking at the 4-hours chart, the pair even settled below the 1.1000 support level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Moreover, there was a break below the last swing low at 1.0992. Finally, the pair tumbled below the 1.236 Fib extension level of the upward move from the 1.0992 low to 1.1095 high.
Before the end of the last week, EUR/USD traded below the 1.0950 level. Therefore, there are chances of more losses below 1.0940. The next support is seen near the 1.0925 or the 1.618 Fib extension level of the upward move from the 1.0992 low to 1.1095 high.
Any further gains could lead the pair towards the 1.0900 support. On the upside, there are many hurdles near 1.0970 and 1.0980. Besides, there is a key bearish trend line forming with resistance near 1.0970.
A successful break above the trend line and a close above the 1.1000 resistance is needed for a decent recovery in the coming days. If not, the pair might test 1.0900 or 1.0880.
Fundamentally, the US nonfarm payrolls report for Jan 2020 was released by the US Bureau of Labor Statistics. The market was looking for the NFP to increase around 160K.
The actual result was way better, as the US nonfarm payrolls increased 225K. However, the unemployment rate increased from 3.5% to 3.6%.
The report added:
Both the unemployment rate, at 3.6 percent, and the number of unemployed persons, at 5.9 million, changed little in January.
Overall, both EUR/USD and GBP/USD are under a strong selling pressure and they are likely to continue lower.
Upcoming Economic Releases
- Euro Zone Sentix Investor Confidence for Feb 2020 – Forecast 4, versus 7.6 previous.
- Swiss CPI for Jan 2020 (YoY) – Forecast +0.2%, versus +0.2% previous.
