- EUR/USD slides into deeper territory on US dollar strength.
- Nonfarm Payrolls are next major fundamental catalyst.
EUR/USD fulfilled the downside expectations analysed in the following prior news: EUR/USD grinding against the London breakout and 10-hour ma, and has printed a fresh corrective low of 1.2235 in the last phase of trade during Tokyo.
At the time of writing, EURUSD is trading between a range of 1.2235 and 1.2272, extending the downside and double top.
Bears are in play as the US dollar collects a corrective bid following two consecutive months of downside.
A rise in US yields has triggered some unwinding of bearish bets on the US currency which has bounced off a nearly three-year low, with traders taking profits against the euro in particular.
We had otherwise seen a slide in the dollar index of nearly 7% in 2020 and as much as 0.9% in the new year amid expectations of US fiscal stimulus ahead of Joe Biden’s inauguration day on Jan 20th.
Earlier in the session, US President Donald Trump finally conceded in a video he posted on Twitter:
US President Donald Trump: My focus is on a smooth transition of power
Nonfarm payrolls up next
Analysts at TD Securities explained that payrolls ”have been rising rapidly by pre-COVID standards, but the pace has been slowing, and the level is still down by 9.8 million since February. The pace probably slowed to the point of contraction in December.”
”A defensive posture is warranted amidst stretched positioning and the recent backup in US yields.”
”A defensive posture is warranted amidst stretched positioning and the recent backup in US yields.”
EUR/USD technical analysis
In the prior analysis, the following chart illustrated where the price would be expected to extend to:
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Live market
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