The euro’s decline against the dollar extended in the New York trading session on Thursday, trading at 1.0295 after losing 0.2% on the daily chart. The EURUSD was on track to record its third successive session in loss, with investors reacting to the December meeting of the Federal Open Market Committee (FOMC).
EURUSD sits in a precarious position, with the pair having hit three-year lows last week. Downward pressure on the pair is exacerbated by the FOMC minutes which showed that the Fed is likely to keep interest rates elevated for a longer period. US inflation rate remains stubbornly above the Fed’s 2% target and Wednesday’s Continuing Jobless Claims figures added support for a higher-for-longer interest rate environment.
The December reading of NonFarm Payrolls data and Unemployment Rate will be out on Friday and will give a clearer picture of the labour market. That will inject fresh volatility into EURUSD. The NFP data exceeded forecast figures in November and a similar occurence could cement confidence in the US economy’s growth path.
On the technical fromnt, the EURUSD pair recently broke below the 20-period Exponential Moving Average (EMA) which was at 1.039 on the daily chart at the time of writing. Therefore, a bounceback above that level could raise the prospect of a reversal.
EURUSD pivots at 1.0311 and the downside will prevail if resistance persists at that level. Withe the sellers in control, the pair will likely find the first support at 1.0275. However a stronger downward momentum could break below that level and potentially test the second support at 1.0250.
Alternatively, the momentum will shift to the upside if the price breaks above 1.0311. That could see the currency pair move higher and find the first resistance at 1.0349. In addition, breaking above that level will invalidate the downside narrative. Also, the momentum could extend gains and test 1.0385.
This post was last modified on Jan 09, 2025, 17:55 GMT 17:55