free counter

EUR/USD fails to recover 1.0200, looks vulnerable as dollar remains firm

  • US dollar holds onto important daily gains after NFP.
  • Employment reports boost US dollar and yields.
  • EUR/USD heads for a modest weekly loss.

The EUR/USD bottomed on Friday at 1.0140 and then rebounded. The recovery of the euro was not strong enough to regain 1.0200. Near the end of the week, the pair looks vulnerable, on the back of a stronger US dollar.

The July employment report showed the US economy added 528K jobs, much more than expected. US yields jumped after the report boosting the greenback across the board.

After NFP, the key report next week will be US inflation numbers. The July CPI is due on Wednesday and a monthly 0.2% increase is expected. On Thursday the PPI will be released. The numbers will be critical for Fed rate expectations. The employment report left the doors open to aggressive tightening.

Another week in the range

Despite the FOMC and the NFP, the EUR/USD continues to move sideways, as has been the case since mid-July. The euro continues to be rejected from near the 1.0280 zone while at the same time it keeps finding support around 1.0100.

“The weekly chart shows that the long-term bearish stance remains intact. Technical indicators hold within negative levels, the Momentum advancing but the RSI extending its consolidation at around 31. At the same time, the 20 SMA heads south almost vertically, roughly 350 pips above the current level but over 800 pips below the longer ones, a sign of bears’ dominance”, explains Valeria Bednarik, Chief Analysts at FXStreet.

According to Bednarik, a break below 1.0105 will open the door for a retest of parity. On the upside, she argues “EUR/USD would need to accelerate through 1.0280 to shrug off the negative stance and extend its recovery towards 1.0360 first and en route to 1.0440 then.”

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.

Read More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker