EUR/USD Fundamental Analysis
EUR/USD recovered some of its previous daily losses on Friday. Most of the Services PMI data from European nations came in line with the expectations of the market on Friday. At the same time, the positive figures for Production data from France and PPI from Eurozone gave strength to the shared currency Euro.
Other than that, the Euro was under pressure from the latest comments of ECB President Lagarde. Despite the fact the ECB announced a 50bps increase in interest rates on Thursday and unveiled its plans for the same rate hike in the upcoming March meeting, the Euro remained under pressure throughout the trading session on Thursday. It was mainly due to the announcement from Lagarde about eliminating the economic development after the next rate hike. She also noted that inflation risks were more balanced now.
In the later part of this trading session, the currency pair EUR/USD will experience volatility amid the release of US employment data. The NFP report, unemployment rate, and average hourly earnings report are scheduled for today. Furthermore, the ISM services PMI from the United States will also impact the prices of EUR/USD.
EUR/USD Technical Analysis
The short-term outlook of the forex pair EUR/USD suggests that it is feeling resistance at the 1.09470 level, where the descending slope of the triangle and Fibonacci 32.8% retracement of the latest uptrend align. However, the 50-Day Simple Moving Average (pink line) is also hovering near a minor difference, indicating that this level might be crucial.
Any break above the psychological level of 1.09448 could push the prices even higher towards the 1.09600 level. After that, the second resistance (R2) is expected to remain at Fibonacci 23.6% retracement of the latest uptrend at 1.09800.
Whereas, on the bearish scenario, the pair could see immediate support (S1) at Fibonacci 50% retracement at 1.09210. In case this level is confirmed as support, the pair would target the next level at 20-Day Simple Moving Average (purple line) at 1.09071 and 1.08820 (today’s lowest level).
Meanwhile, the Stochastic Oscillator moving in the overbought zone suggests that the pair might experience a reversal anytime soon. On the other hand, MACD delivers other signals with histograms appearing above the red signal line.
Traders will keep their focus on US Employment Data for January, which is scheduled to release in the American trading session. The idea is to stay cautious ahead of this data and watch closely before taking any position in the market.
Daily Technical Levels
Pivot Point: 1.0943