EURUSD Price Analysis: Upside Limited as NFPs Loom
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Euro and US dollar:
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EURUSD Rally Running into Resistance
The impressive bounce off 1.1300 has seen EURUSD push back above 1.1420 - a fresh one-week high - and back towards a confluence of important chart points between 1.1461 and 1.1557. The upside may be limited in the short-term however by the latest look at the US labor market, with 193k jobs new jobs expected to have been added last month. Today’s average hourly earnings figure may be of more interest however, especially for inflation watchers, with a rise of 3.2% m/m in October expected, compared to 2.8% last month.
The bounce off 1.1300, the August 15 low print, coincided with a bout of USD weakness, with the US Dollar basket (DXY) over 1 point lower in the last two days. Support for the greenback nears at 95.55 and 95.21. The uptrend remains in place for now but a break and close below the October low at 94.98 would threaten further upside.
The US dollar weakened overnight after US President Donald Trump indicated that trade talks between the US and China had been productive and that he had asked officials to begin drawing up a draft agreement.
US Dollar Basket Daily Price Chart (February – November 2, 2018)
IG Client Sentiment Data shows investors are currently 62.6% net-long EURUSD – a contrarian bearish signal – but recent daily and weekly positional shifts give us a mixed EURUSD bias.
EURUSD Daily Price Chart (February – November 2, 2018)
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.