Search ForexCrunch
  • The EUR/USD supported above 50 EMA ahead of the US nonfarm payrolls figures on Friday. 
  • German Retail Sales in July dropped to-5.1% against the anticipated-0.9%.
  • Forex trading market participants may look for a buy trade above 1.1820 with an initial target of $1.1850 and $1.1890 levels. 

The EUR/USD currency pair closed at $1.1837 after placing a high of $1.1858 and a low of $1.1793. The currency pair EUR/USD continued its bullish streak for the 4th consecutive session amid the prevailing weakness in the US dollar. The EUR/USD supported above 50 EMA ahead of the US nonfarm payrolls figures on Friday. 

 

If you are interested in trading EUR/USD with forex robots, check out our guide.

Weakness in the US Dollar underpins the EUR/USD Pair.

The US Dollar Index (DXY), which measures the greenback’s value against a basket of six major currencies, fell for the fourth session. It settled down at the 92.5 level. Furthermore, the US Treasury yields on the benchmark 10-year note also declined on Wednesday. It reached 1.29%, which added to the weakness of the US dollar. It pushed the EUR/USD currency pair higher on board.

The dismal job creation drove the weakness of the US dollar by private employers during August. The greenback was already under pressure for the past few days after Fed Chairman Jerome Powell failed to give a specific timeline for tapering. Moreover, the Fed will remain cautious about raising interest rates. Investors were largely expecting some clues from him about tapering economic support. In the case of no hints, it could start to crush their hopes and end up weighing on the US dollar.

Bundesbank President Jens Weidmann Speaks About Inflation

On Wednesday, Bundesbank President Jens Weidmann said that Eurozone inflation was at risk of overshooting the ECB’s projections. The temporary factors behind the recent spike could seep into underlying price growth.

He warned that inflation could rise noticeably in the longer term. That’s likely if temporary factors lead to higher inflation expectations and accelerated wage growth. These comments from Weidmann prompted hopes that the ECB should have to end its $2.19 trillion PEPP economic stimulus.

As a result, the expectations added further strength to the Euro against the US dollar and pushed EUR/USD higher on board.

Quick Update on Economic Events

From the US side, at 17:15 GMT, the ADP Non-Farm Employment Change declined in August to 374K against the anticipated 640K. At 18:45 GMT, the final Manufacturing PMI from August remained flat with the projections of 61.1. At 19:00 GMT, the ISM Manufacturing PMI in August advanced to 59.9 against the anticipated 58.5, caping gains in EUR/USD. Construction spending remained unchanged from the forecasted 0.3%.

The ISM Manufacturing prices fell to 79.4 against the predicted 84.1 and weighed on the US dollar. That added further upside momentum to the EUR/USD pair. The macroeconomic data from the European side came in favor of the single currency Euro. Therse kept supporting the upside momentum in the EUR/USD currency pair.

Automatic Data Processing, Inc. Employment Report in Play

From the US side, at 17:15 GMT, the ADP Non-Farm Employment Change declined in August to 374K against the anticipated 640K and weighed on the US dollar.

At 18:45 GMT, the final Manufacturing PMI from August remained flat with the projections of 61.1. At 19:00 GMT, the ISM Manufacturing PMI in August advanced to 59.9 against the anticipated 58.5 and supported the US dollar, which further capped gains in EUR/USD. Construction spending remained unchanged from the forecasted 0.3%.

The ISM Manufacturing Prices fell to 79.4 against the predicted 84.1 and weighed on the US dollar. That added further upside momentum to the EUR/USD pair. The macroeconomic data from the European side came in favor of the single currency Euro, which also kept supporting the upside momentum in the EUR/USD currency pair.

Weaker US Dollar in Play ahead of US nonfarm payrolls on Friday

Apart from the strength of the single currency Euro and the weakness of the US dollar, the gains and upward momentum in the EUR/USD pair could also be attributed to the prevailing risk-on market sentiment driven by the rising vaccination rate across the globe. 

Despite the spread of the Delta variant and the discovery of a new mutated variant in South Africa, the market mood remained positive amid the reopening of borders across the globe for fully vaccinated people. 

The rising hopes for a quick economic recovery improved the market’s risk sentiment, and, hence, the riskier assets like EUR/USD remained high on board.

On Friday, the Bureau of Labor Statistics is due to release the US nonfarm payroll data to help determine further trends in the EUR/USD pair. 

US nonfarm payrolls on Friday
EUR/USD 4-Hour Timeframe

EUR/USD Price Forecast – Daily Technical Levels

Support Resistance

1.1800 1.1865

1.1764 1.1894

1.1736 1.1930

Pivot Point: 1.1829

EUR/USD Price Forecast – Daily Technical Analysis: US nonfarm payrolls on Friday

The EUR/USD is trading sharply bullish above the 1.1800 support level. On the 4 hour timeframe, the violation of the double top pattern is now working as a support for the EUR/USD pair. The closing of candles above this level could drive an additional bullish trend until the 1.1857 resistance level.

On Thursday, the EUR/USD pair is trading with a bullish bias at the 1.1844 level while traders await US nonfarm payrolls Bureau of Labor Statistics

On the bearish side, the breakout of the 1.1800 support level could lead the EUR/USD pair towards the 1.1749 level. The 50 days EMA (Exponential Moving Average – Red Line) is held at 1.1820, supporting a bullish trend in the EUR/USD pair.

On the flip side, the oscillator indicator Stochastic RSI holds in a buy zone, demonstrating a buying trend. Therefore, Forex trading market participants may look for a buy trade above 1.1820 with an initial target of $1.1850 and $1.1890 levels. Alternatively, sell trades can be taken below the $1.1820 level to target $ 1.1765. All the best!

Looking to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

 

Expert score

5

Etoro - Best For Beginner & Experts

  • 0% Commission and No stamp Duty
  • Regulated by US,UK & International Stock
  • Copy Successfull Traders
Your capital is at risk.