EURUSD Outlook: bulls eye 1.12 zone after break of key barriers
Our preference: long positions above 1.1148 with targets at 1.1171 & 1.1200 in extension.Alternative scenario: below 1.1148 look for further Downside with 1.1100 & 1.1065as targets.
The Euro maintains firm tone on Thursday and keeps focus at the upside after
strong bullish signal was generated on Wednesday’s surge and close above key 1.1140 resistance zone.
Rising bullish momentum on daily chart and MA’s in bullish setup support the advance,with long-tailed bullish candle of last Friday also underpinning the action. Fresh bulls retest cracked barrier at 1.1162 (50% of 1.1239/1.1084) and
eye 1.1180/1.1200 (Fibo 61.8% / 6 Jan high/Fibo 76.4%). Broken 1.1140 pivot now offers strong support which is expected to hold and keep bulls in play
EUR/USD Forecast: Three reasons for the bounce and why it may not last
Our preference: long positions above 1.1123 with targets at 1.1170 & 1.1221 in extension.Alternative scenario: below 1.1123 look for further Downside with 1.1101 & 1.1080as targets.
EUR/USD has been rising after the US published weak jobs figures.
Optimism about trade is weighing on the safe-haven greenback.
The currency pair has escaped crashing below the uptrend support line.
Has the world’s most popular currency pair bottomed out?
While the common currency is enjoying the misery of the dollar,
it has weak foundations to lean on.
Here are the reasons for the bounce:
1) Weak US Non-Farm Payrolls
The US economy gained only 145,000 jobs in December, worse than 164,000 that appeared on the calendar – and also below higher “whisper numbers. for the Non-Farm Payrolls. Estimates had been revised to the upside ahead of the publication. Moreover, the labor market’s
gains in 2019 were the worst since 2011.
Also, wage growth disappointed with 0.1% monthly and 2.9% yearly,
showing that inflation – which the Federal Reserve also targets – is unlikely topick up anytime soon.
2) Trade hopes
Liu He, China’s Vice Premier, is heading to Washington to sign Phase One of the trade deal. Ahead of the ceremony, the world’s largest economies expressed optimism – and the upbeat tone weighs on the safe-haven dollar.
Steven Mnuchin, the US Treasury Secretary, suggested that both countries should restart their strategic dialog. This mechanism for defusing tensions was last in use by President George W. Bush in 2006
GBP/USD a decisive positive candle forming to leave support around $1.3050
Our preference: long positions above 1.3141 with targets at 1.3185 & 1.3243 in extension.Alternative scenario: below 1.3117 look for further Downside with 1.3084 & 1.3043as targets.
The near term outlook has taken on an increasingly uncertain configuration in recent sessions.
However, taking a step back and we continue to view support around $1.2900/$1.3000 on a medium term basis as a buying
opportunity. Ongoing positive configuration on momentum (RSI above 40, MACD lines above neutral,
Stochastics rising above 50) suggests that corrections remain a chance to buy.
Yesterday’s reaction only adds to that view,
with a decisive positive candle forming to leave support around $1.3050. However,
looking on the hourly chart there is a lack of conviction,
as the hourly RSI oscillates between 30/70 (turning back from 70 again) whilst the MACD and Stochastics lines both post
bear crosses. It suggests a lack of traction follow through from yesterday’s rebound.
Above initial resistance at $1.3180 would test the 23.6% Fibonacci retracement (of $1.2192/$1.3515) around $1.3200,
but the key near term resistance is at $1.3285.