US Employment Data Sets Stage for EUR/USD, EUR/GBP, and GBP/USD Price Action: Levels to Watch
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In the world of forex, the next big move can be a thrill for traders, and this morning is no exception. As market participants await the release of highly anticipated US employment data, currencies like the euro, pound, and dollar have taken a step back, pausing to survey the landscape ahead. With anticipation building, levels to watch become crucial in forecasting potential market trends. In this article, we’ll delve into the current status of EUR/USD, EUR/GBP, and GBP/USD, shedding light on pivotal support and resistance levels that traders should keep in mind.
To start, it’s essential to acknowledge the fundamental forces driving currency movements. Job numbers in the United States play a significant role in shaping global markets, especially for the majors. The anticipated data release may have investors repricing their risk tolerance, altering sentiment, and, in turn, influencing FX markets. Now, let’s examine the currencies mentioned in our title.
EUR/USD Closes in on the 100-DMA as US Employment Looms Large
EUR/USD has entered a holding pattern, trading roughly between the psychological $1.2000 threshold and the top of the uptrend channel ($1.2444). If we zoom out, we see the pair hugging the lower Bollinger Band, demonstrating the resilience of this currency duo. With Friday’s employment release expected to put the US Dollar Index under increased scrutiny, short-term traders could benefit from placing bets on subtle changes in US dollar sentiment.
EUR/USD has some work to do to reclaim higher grounds, not least because a close above $1.2366, an old high since January 16th, seems to be waiting for a firm commitment. There is, indeed, some encouragement emanating from the fact the pair has risen 1% over the previous 10-day period, bolstering its claim for further upwards movement. While $1.2300 would still serve as a formidable first level of defense for the support team, Friday’s numbers and any potential surprise in the global growth narrative have the potential to swing the game either way in this pair.
EUR/USD is likely in the spotlight come Friday, anticipating US employment release.
EUR/GBP: UK Retail Sales Show Mixed Signals – Can the Recovery Continue?
Across the pond, EUR/GBP is facing off against the choppy waters of Brexit uncertainty and an increasingly delicate global economy. With the January UK retail sales figures painting an unclear picture – an increase on the year-ago level came at the cost of a modest contraction from last month – FX traders are poised to reassess their stance regarding this currency pairing.
In line with this fragile equilibrium, any shifts in currency valuations between the two EU member states seem destined to receive closer scrutiny going forward. Even a modest strengthening of the European Union’s fiscal framework, given the recent announcements regarding the Multiannual Financial Framework (MFF), could cause investors to temper their enthusiasm.
For now, the focus resides on the downtrend channel created since mid-June 2018, its lower edge offering potential support, roughly around £0.85. In keeping with the short-term trend in this pair, EUR/GBP might aim at a level beyond £0.8600 following Friday’s results, which – given the 3.15% decline suffered in the prior week – hints at a 5.47% rise following a similar week-long slump on January 5th. Nevertheless, any move in the latter’s favor does come with uncertainty.
GBP/USD: Pivotal Trendline Resistance for a Bull Run
GBP/USD has a history of volatility, and even in the most uncertain of circumstances, the pairing often manages to conjure the strength to test major trend lines. In keeping with this volatile history, if Friday’s event-driven data forces investors to confront their risk perspectives, the mid-June lows could serve as the starting line for a notable upward movement within this currency exchange.
In theory, a fresh breach of 55-day exponential moving average around $1.2449 at this stage appears likely, thereby enabling the chartists to once again consider crossing $1.25, previously witnessed in October and December as minor resistance on this currency’s way up from Monday’s lower channel line to the late October peak. By that token, there are already early signs from last week as we move upward.
GBP/USD, therefore, will provide valuable insights going forward, making the levels from late January interesting, particularly a fresh break. It’s more crucial to grasp these pivotal numbers than the daily performance.
GBP/USD (4-hour view) with respect to its last major peak last Wednesday, just over $1.2557.
GBP/USD, an early sign ahead of Friday is likely to prove interesting, despite any possible impact of US labor market data; Friday’s key figures may significantly affect this dollar.
In anticipation of the coming employment data in the United States, it may be essential, then, that investors carefully note these crucial FX levels for an idea of future movements in USD/JPY. With numerous indicators hinting at the 4th interest rate cut on the horizon as a means to bolster the domestic economy, in a manner as in line with recent actions within the last years. In today’s environment it seems as in this manner US Federal Reserve rates.
