At the close of the week, the EUR/USD is trading inside a narrow range and is just below the end of the current trend in the themed-1.1500 region. Payrolls are now the focus of the EUR/USD. In the wake of widespread caution ahead of the US payrolls, it appears that the EUR/USD has finally settled into a low trading confined pattern.
As a result, the duo is fluctuating between price movements in the 1.1550/60 scope against the background of a slight bias towards the Dollar, which has been bolstered by the rise in US yields, especially after Republicans and Democrats consented to prolong federal public funding till December, thereby buying more time to fix the prickly debt limit problem.
Earlier on Friday, it was announced that Germany’s trade surplus had reduced to €13 billion in the previous month and that the country’s account had dropped to €11.8 billion at the same time. Shortly in the NA day, the ever significant Nonfarm Payrolls (500K exp.) and the Unemployment Rate (5.1 percent exp.) are due (both at the same time).
Overview of the Technical Details
EUR/USD CHART. Source: Tradingview.com
Indicators such as the Relative Strength Index (RSI) on the four-hour chart have changed direction after reaching near 50 on Thursday, indicating that buyers are finding it difficult to gain control of the EUR/USD currency pair. On the negative, sellers would seek a breach of 1.1530-the 15-month low reached in October 6-and, if that protection fails, they will look for 1.1500 as a new target. Finally, the prior opposition mark from June 2020 at 1.1425 coincides with the current line of defense to create the final line of defense.
The first level of protection is found at 1.1570 (20-period simple moving average, Thursday’s high), followed by 1.1620 (Fibonacci 23.6 percent retracement of the downturn that began in early September), and finally at 1.1620. If buyers can keep the currency just above 1.1680 at the end of the day (Fibonacci 38.2 percent retracement), the rally could continue to 1.1680.
What Else To Watch For In EUR
The EUR/USD remains under significant pressure, and the possibility of further depreciation remains available in the event of good news in the Payrolls report. Greater US yields, as well as stints of risk aversion – particularly in the wake of the debt limit debate – exert a significant influence on the results of the risk universe. The forecast appears to be under strain due to the growing supposition that inflation will take longer to overturn the current high levels than previously anticipated. Additionally, the expected pullback in the improving economy, as seen by some deterioration evident in key principles, limits the duo’s promising prospects.
The following are the most pressing concerns on the back burner: In the region, there has been asymmetrical economic growth, the long-term viability of the increase in inflation figures, vaccine program progress and the Delta strain of the Coronavirus are being closely monitored, political exuberance around the EU Recovery Fund is a distinct possibility, because of the outbreak, investors are shifting their portfolios to European assets, which might provide additional support for the Euro, and lastly, speculations about the European Central Bank tapering.