- US nonfarm payrolls disappointed, but the unemployment rate improved.
- Inflation in the euro area reaches 5%, exceeds estimates.
- EUR / USD Technical Outlook: The 1 hour chart shows a bullish bias, although a break above 1.1400 increases the chance of an attempt to hit the 100 DMA at 1.1500.
After a mixed-than-expected US employment report weakened the US dollar, the euro advanced for the second time this week. During the American session, the EUR/USD it is trading at 1.1346 at press time.
The mood of the market is one of risk aversion, as shown by the European stock indices that close lower, while the Americans are losing, with the exception of the Dow Jones Industrial (DJI) which is up 0.34%. Additionally, the 10-year US Treasury yield hit a year high of 1.801%, without boosting the US dollar, with the US dollar index falling 0.56% to 95.78.
The US non-farm payroll report was mixed, while euro zone inflation hit 5%
Earlier in the North American session, the Bureau of Labor Statistics (BLS) released the US Non-Farm Payrolls report for December. The numbers were worse than expected, with the US economy adding 199,000 jobs, less than the 400,000 expected by analysts. However, the Unemployment Rate improved, from 4.1% to 3.9%, reaching a minimum of 22 months.
The December report is unlikely to reflect the impact of the fourth wave of Covid-19, linked to the Omicron variant. The survey was conducted in mid-December, just as the newly discovered strain arrived in the US.
Meanwhile, the economic agenda of the Eurozone presented inflation figures. The December HICP increased by 5.0% in its annual rate, higher than the 4.7% estimated by analysts. The jump in the figure is attributed to high energy prices, which were up 26% compared to 2021. However, increases in imported food, services and goods also exceeded the European Central Bank’s 2% target.
EUR / USD Price Forecast: Technical Outlook
Once the macroeconomic data for the Eurozone and the US are in the rearview mirror, the EUR / USD stabilized around the 50-day moving average (DMA) at 1.1352. Given that the Relative Strength Index (RSI) is at 53 in bullish territory, the pair could take a step up, but it would face stiff resistance around December 31, 2021, daily high at 1.1386. A decisive break out of that supply zone would send the pair towards 1.1400.
On the other hand, the first support for EUR / USD is the January 5 high at 1.1346. A breakout of the latter exposes the daily pivot R1 at 1.1325, immediately followed by a robust support area where all hourly Simple Moving Averages (SMAs) converge with the daily pivot point around the 1.1308-16 region.
Additional technical levels
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