EURUSD, H1
EURUSD remained in a narrow range below the six-day high seen yesterday at 1.1147. The Crossing EMA strategy produced an initial short position at 11:00 GMT (1) following a rejection of yesterday’s high, the 200 MA (2) and the 38.2 Fibonacci level (3). A breach of the daily Pivot Point (4) has seen the price move down to both T1 (5) and T2 (6) (net gain 15 pips) and also test the S1 level and yesterday’s low at 1.1111.
The Dollar itself has lost some buoyancy in the wake of last Friday’s below-forecast US jobs report for December. US nonfarm payrolls missed with a rise of 145k, while wages and hours worked were soft. Markets are factoring in about a 55% chance for the Fed to cut by 25 bps or more by year end, up from the about 50% odds being given ahead of the jobs report. The ECB, meanwhile, is embedded in a wait-and-see policy stance. EURUSD has been trending lower since early 2018, dropping from levels near 1.2500 and posting a 32-month low at 1.0879 in early October, the current nadir of the trend. Momentum has faded, with the Fed having backed out of its tightening cycle after hiking rates three times last year.
Meanwhile, conversely, EURJPY posted a five-month high today, and EURGBP a seven-week high.
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Stuart Cowell
Head Market Analyst
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