The EURUSD pair is little changed today as traders remain cautious ahead of the important US nonfarm payroll numbers that will come out at 12:30 GMT. As of this writing, the pair is trading at 1.1850, which is substantially lower than this year’s high of 1.2000.
The EURUSD pair has been under pressure this week as traders react to the strong economic data from the US and the mild numbers from Europe. Yesterday, data from Markit showed that the services PMI in the US rose to 54.6 in August even as more states limited business activities. In contrast, the services PMI in the EU fell from 54.7 in July to 50.5 in August.
On the same day, data from the Bureau of Labour Statistics (BLS) showed that just 881K people filed for initial jobless claims in the previous week. While this number is significantly above the historical average, it is the lowest it has been since March. Other numbers from the US released this week have been relatively strong.
And today, the EURUSD pair will react to the nonfarm payrolls numbers. Analysts expect that the economy added more than 1.4 million jobs in August after it added 1.75 million in the previous month. This will bring the total number of jobs added since May to more than 10 million. Still, this shows that more than 10 million jobs have disappeared this year.
Separately, analysts at Danske Bank have now changed their opinion on the EUR/USD pair. In a report published today, they believe that the pair will climb to 1.23 in the next three to six months before pulling back to 1.18 in the next 12 months. They wrote:
“We have changed our EUR/USD forecast profile to account for markets pricing in a nominal drift in favour of the cross during the remainder of H2 but still project that structural (real) factors will gradually start to weigh in 2021. We now see the cross at 1.23 on 3-6M, but still look for a drift lower again further out and target the cross at 1.18 in 12M.”
EURUSD technical outlook
The daily chart shows that the EURUSD has found strong resistance after it reached a high of 1.2000. The chart also shows that the pair has formed an equidistance channel that is shown in black. It is now at the lower side of this channel. Also, it is above the 50-day and 100-day exponential moving averages.
Therefore, there are two scenarios that could happen. On the one hand, the pair could bounce back as bulls aim for the upper side of the channel. On the other hand, a break below the support could send a signal thar bears have overcome, which could push the price lower.