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Jan 05 - 11:55 AM

EUR/USD - COMMENT-EUR/USD Longs May Have To Throw In The Towel; Payrolls, ISM Key

By Christopher Romano  —  Jan 05 - 10:15 AM

EUR/USD fell Thursday and pierced the rising trendline off the Nov.
11 daily low, and those remaining long may have to exit if upcoming data underpins the dollar.

A slew of upbeat employment data nL1N33P1GHnL1N33P1QY suggest the jobs market remains robust, leading interest rates EDZ3US2YT=RR to rally sharply, suggesting investors expect the Fed to maintain its hawkish stance and possibly raise rates higher than anticipated.

The dollar rallied broadly on the data, which helped reinforce bearish technical signals in EUR/USD

Daily and monthly RSIs imply downside momentum is building while consolidation of the fall from the Dec.
30 daily high is ongoing.
EUR/USD's inability to sustain momentum above the 10- and 21-day moving averages highlights the downside risks for the pair.

December U.S. non-farm payrolls and average hourly earnings as well as ISM non-manufacturing PMI data due Friday will be key.
Both data points are estimated to drop from November's results.
An unexpected downside surprise could weaken U.S. rates and the dollar, which would likely give EUR/USD's rally a chance to resume.

For more click on FXBUZ


Source:
Refinitiv IFR Research/Market Commentary

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