- The EUR / USD decline appears supported around the 1.1950 region.
- A downward correction of the USD offers support to the pair.
- NFP non-farm payrolls will focus investors’ attention at the start of the US session.
The downtrend in the pair EUR / USD seems to have found decent support at the 1.1950 region so far this week.
EUR / USD focuses attention on data
EUR / USD returns to smile on Friday after four consecutive daily falls, including a break below psychological support at 1.20 on Thursday and setting new yearly lows near 1.1950.
The actual selling sentiment around the US dollar allows some respite in the EUR / USD pair amid the recent sharp downward correction, although further declines are expected in the very short term.
Strong US macroeconomic data, coupled with successful vaccine launch in the country compared to Europe, and higher US yields They have maintained the moderate bullish bias around the USD, lifting the US Dollar DXY index to new yearly highs well above the 91.00 level.
There is no data programmed in the euro area, except for the speeches of the members of the ECB A. Enria and L. De Guindos. Across the Atlantic, the US NFP monthly jobs report will be released, with payroll expected at 50,000 new jobs created in January and the unemployment rate remaining at 6.7%.
What can we expect around the EUR?
EUR / USD appears to have found decent support in the 1.1950 region so far this week, at new lows of 2021. While the outlook for the pair looks bearish in the very short term, it remains constructive in the long term and they are always supported by the prospects for a strong recovery in the region (and abroad), which in turn is underpinned by additional fiscal stimulus from the Fed and the ECB. Furthermore, real interest rates continue to favor the euro area over the US, which is also another factor supporting the euro.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.15% on the day, trading at 1.1979. A break above 1.2064 (38.2% Fibonacci retracement of the November-January move), would target 1.2115 (55-day SMA) en route to 1.2189 (January 22 high). On the downside, initial support is at 1.1952 (Feb 4 low), followed by 1.1887 (61.8% Fibonacci retracement of the Nov-Jan move) and finally 1.1688 (200-day SMA).