One big event giveth, the other taketh away. A weekly gain worth almost 400 pips was reduced to only 100 pips, mostly due to the excellent US jobs report.
Draghi’s reluctance to express worries about bond market volatility or commit to front loading QE. Together with some unconvincing US data, EUR/USD rallied hard. At one point it hit resistance at 1.1373, which was a peak back in November 2013.
Update: the pair continues falling to support at 1.1050.
However, as the bond and especially the bund sell-off calmed down and partially reversed, the pair dropped over 100 pips. Also Greece’s latest actions weighed on the common currency.
Yet the biggest blow came from the US NFP. With strong job gains, a rise in wages and also a sign of a widening work force, the greenback could not be stopped. Here is an analysis of the report.
At the time of writing, EUR/USD is trading at 1.1083, exactly 100 pips above the close last week. There are still a few more hours to trade. The critical line of support is 1.1050 – this is undoubtedly a separator of ranges.
Further support awaits at the round 1.10, followed by 1.0910. Resistance awaits at 1.1190.
Here is how it looks on the chart:
In this week’s podcast, we explain why EUR rallied on Draghi, what’s next, discuss oil and gas, run through the Plus500 story and preview next week’s events.
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