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- The pair will test the region of 1.1440 on Friday.
- The greenback continues to recover and tests 95.60 / 65.
- The final PMI indices of EMU, the next most relevant advanced CPI.
The sales bias around the single currency remains good and solid in the second half of the week and is now lagging behind EUR / USD in the region 1,1440, coinciding with the 100-day SMA key.
The EUR / USD looks at the CPI and the NFP
So far, Spot is down for the second consecutive session today, under additional pressure after failing Thursday in the 1.1510 / 15 band, where is taking place a Fibo retracement of the September-fall. December.
The feeling of risk is suffering from the poor figures of the Chinese manufacturing PMI Caixin published overnight, which has still moved to contraction territory in January (48.3). These data somewhat overshadowed the positive tone of the US-China trade talks in Washington, where both sides agreed to resume negotiations later this month.
As far as data is concerned, Euroland and final January manufacturing PMIs should not change the dial in euros, leaving all the attention to preliminary inflation figures for the region over the same period. On the other side of the pond, the greenback should be under pressure given the slackening of the non-agricultural payroll.
What to look around EUR / USD
Fourth-quarter GDP figures in Euroland sparked some optimism among traders, with the hope that the current slowdown in the region could be temporary. Euroland policy will also be a factor to take into account in the coming months, with the next May European legislative elections and vigilant investors on the social scenario in France and populist developments in Italy. On the US dollar side, the Fed's now neutral stance may limit occasional take-back attempts, while markets continue to seek clues as to the timing of the balance sheet.
EUR / USD levels to watch
For the moment, parity is losing 0.06% to 1.1439 and a distribution of 1.1434 (February 1st low) would target 1.1422 (21-day SMA) to reach 1.1390 (SMA 55 days). On the other hand, the next rising barrier is 1.11514 (January 31st high), supported by 1.1515 (50% Fibo from the September-November decline) and finally 1.1515. (higher in 2019 on January 9).
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