EURUSD: A decision turning point post NFP!

5 Jan

Analyzing the EUR/USD situation, we can observe a series of dynamic factors that have recently influenced its behavior. The EUR/USD's bullish move, having crossed 1.0950, was triggered by disappointing ISM Services PMI data after gathering liquidity below 1.09 following the NFP data. Currently, the pair maintains a defensive stance, trading in negative territory below 1.0950 as market attention shifts to the December jobs report from the U.S. Initially, the positive risk mood made it difficult for the USD to find demand on Thursday morning. However, after the ADP Employment Change data for December exceeded expectations, rising to 164,000 versus the forecast of 115,000, the yield on the U.S. ten-year Treasury bond surpassed 4%, thereby supporting the USD in limiting its losses. The CME Group's FedWatch tool indicates that markets are pricing in a 65% probability that the Federal Reserve will cut the policy rate by 25 basis points in March, down from the 85% seen earlier in the week. In conclusion, EUR/USD is at a really interesting point, at the 1.0950 level and is about to close the daily candle with a neutral doji. I expect a rise from the Euro on Monday in the face of an approaching American recession, aiming for a rebound of the Euro towards the 1.1150 area as identified on the chart. Best wishes and have a great weekend from Nicola.