EURUSD At Four-Month Lows On Strong U.S. Economic Data
EURUSD finally the last two hours the break below the 1.10 mark and the selling pressure accelerated sending the pair to fresh four-month lows. As of writing EURUSD is 0.19% lower at 1.0978 having hit earlier the daily and four-month lows at 1.0964.
US Dollar benefitted from stronger economic data out of the USA. The United States Nonfarm Productivity increased to 1.4% in the fourth quarter from previous -0.2%. The Initial Jobless Claims came in at 202K, below the forecasts of 215K in January 31. The Continuing Jobless Claims on January 24, came in at 1.751M topping the estimates of 1.72M. Service sector activity accelerated in January with the non-manufacturing ISM index rising to 55.5 from 54.9. The ADP also reported the highest month for the private sector job growth since 2015. Tomorrow we have the non-farm payrolls report, and the odds favour a strong report. January’s report won’t include the impact of coronavirus spread and it will not affect the Fed’s near term policy plans.
Eurozone economic data was mixed. The composite PMIs were revised higher, but the retail sales was a disappointment for December. The comments from ECB President Lagarde were not encouraging. She said climate change would affect the monetary policy while coronavirus outttbrrreak adds to the uncertainty.
EURUSD breached below the 1.10 mark that provided strong support for the last trading sessions. Selling pressure accelerattted and more sellers stepped in and push the price down to four-month lows. Now the outlook is bearish and only a break above 1.10 mark can cancel that trend.
On the downside initial support for EURUSD stands at 1.0964 the daily low. In case the pair breaks below, then the next target to the downside is at 1.0948 the low from October 9th. Next support area would be met at 1.0903 the low from October 2nd trading session.
On the upside, the first resistance for the pair stands at 1.1113 the daily top. A move above that resistance will attract more bulls for an attempt to recapture the 100-day moving average at 1.1067. The next supply zone for EURUSD stands 1.1093 the 50-day moving average.