EUR/USD Pauses After Yesterday’s Rally – Eyeing NFP Data

The euro rallied after ECB president Lagarde’s comments at the post meeting press conference. Traders sitting on the sidelines running up to NFP numbers.

The market got a boost yesterday from the comments of the ECB head which lead to believe that interest rates will stay high for longer, unless inflation data proves otherwise.

The interest rate cut from yesterday had already been priced in by the market and caused little volatility. Despite the euro having lower rates, the EUR/USD rallied after the press conference.

Trader attention has now turned to the NFP data this afternoon. Forecasts are for an increase of 185K, which would show a healthy economy. The number should spark a rally in the dollar as the market perceives a possible delay in Fed action to cut rates.

However, the euro also has its bullish points, latest inflation data was higher than the previous, rising from 2.4% to 2.6%. This data adds to Lagarde’s comments yesterday, so despite bullish NFP numbers, it might not be enough to see a rally in the dollar against the euro.

Technical View

The chart below shows EUR/USD broke above the Ichimoku cloud on June 4, the first time since January. The breakout is an indication of a bullish trend ahead. The market has already managed to close above the previous double high of 1.08845 (red line).

More confirmation of a bullish trend is needed, for which we would need to see a close above a previous high of 1.0940 (black line). The next resistance would be at 1.0980, followed by 1.1019 (blue lines).

For full confirmation of a bull trend, we would need to see the market close above 1.1139 (green line).

Failure to continue above the high of 1.1139 should be read as a market in a sideways trend. The drift lower from the end of last year has been slow and with many swings. Not exactly a clear trend, even if we saw a low of 1.0601 in May.

ABOUT THE AUTHOR See More

Gino Bruno D'Alessio

Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.

Related Articles

Forex Signals April 25: Will Trade Talks & Earnings Offer a Bullish Finish for DJIA?

2 days ago

Save

EUR/USD Holds $1.1306—Market Eyes ECB Cuts and Trump’s Trade Standoff

2 days ago

Save

EUR/USD Gains—$1.1419 in Sight on ECB Shift, USD Weakness

3 days ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments