© O Financista.
By David Wagner
After testing the psychological threshold of major 1.10 Wednesday, and then consolidated for a while around this level, the EUR/USD pair has resumed its decline to new lows annual yesterday.
The Euro-Dollar has in fact marked a low of 1.0964, in the context of a fourth consecutive day of decline.
The origin of this movement, we find above all a strengthening of the us Dollar, as seen on the US Dollar Index, which has posted yesterday a fourth day of consecutive rise.
The Dollar had been boosted by a series of positive surprises in the economic calendar, to a new fall of the EUR/USD in the face of the report NFP ?
The greenback is benefiting in effect of a series of statistics US exceed expectations this week. We remind you that as of Monday, the ISM manufacturing index US for the month of January was a surprise comeback to the top of the cap of 50 points, which marks the border between contraction and expansion of the sector. Tuesday, orders to industry for the month of December, have also far exceeded expectations.
On Wednesday, the ADP report on job creation in the private sector in the month of January came almost two times higher than expected at 291k against 156k anticipated. In the same day, the ISM services rose to 55.5 points, compared to 55 in advance.
Yesterday, the main statistical US was quite secondary, and dealt with the inscriptions weekly unemployment.
However, they have proved to be below expectations, confirming the strength of the labour market for the last week of January, which added to the ADP report (AP:ADP) well in excess of the expectations of Wednesday, has no doubt prompted the market to revise upwards its expectations for the report NFP expected this Friday, and which is undoubtedly to be regarded as the key event of the week for the Euro-Dollar.
The consensus, established before the indicators are encouraging in this week’s table on 160k job creations, after 145k in the previous month. But with the recent good news, Goldman Sachs (NYSE:GS), for example, stated last night, expect it to 190k new jobs.
If this is confirmed, the decline of the EUR/USD could benefit from a new breath.
It should also be noted that several european statistics were disappointing this week did not help the situation, either in regard to the fall much worse than expected retail sales in the euro zone by Wednesday, or divers orders in the industry and German industrial output yesterday and today.
Technical update EUR/USD
From a graphical point of view, it will be recalled that the week started on Monday with a break below the moving average 100-day, currently at 1.1063, which was a bearish signal important. The break below 1.10 confirmed yesterday has further validated the bearish view of the EUR/USD.
At this stage, little support can be identified before 1.0925 (lows of 3 and 12 September 2019), then the psychological threshold of 1.09, and the lowest of the last year at 1.0880.
Finally, it should be noted that a return of the EUR/USD above 1.10 would weaken the downtrend the immediate, but only a return back above the moving average 100 days would consider a reversal of the uptrend sustainable.