Eurusd In Consolidation

The euro rose against the dollar during the Asian session before erasing all it gains in the US. The dollar rose across the board, ignoring the weak US GDP data for the 4th quarter.

GDP figures came out lower than the estimates and the reading for the previous quarter was revised downwards, which is a negative for the dollar.

These negatives were cancelled out by the index for durable goods orders, which came out much better than expected, as well as the rise in US 10Y bond yields. The pair dropped from a high of 1.2494 to 1.2406 (-88 pips).




My predictions for Friday came off in full. At the time of writing this review, the euro is trading at 1.2411. Buyers were met with resistance around the 1.24 region, through which the upper line of the recently broken B-B channel runs.

The daily candlestick has a bullish body and a long wick. This is the second candlestick with a long shadow that we’ve seen in recent times. These suggest a strong resistance around 1.25, so we’ll most likely see a correction on the euro ahead of Friday’s payrolls.

Trader attention this week will turn towards the upcoming FOMC meeting and Friday’s payrolls report for January.

See more today forex market analysis in alpari.com

 

During the US session, sellers trading on the news managed to break through the horizontal support zone of 1.2340 – 1.2350, as well as the trend line from the 1.2273 low. The drop slowed down around the 90th degree. This isn’t a significant support level, so after a correction to 1.2324 (22 degrees), I’m expecting the euro to drop against the greenback to the 112th degree at 1.2274.

The trend line extended from the high of 1.2413 runs through 1.2450 on the current hour (9:00 EET). Here, it is being bolstered by the 45th degree. Given that trading in Asia today paints a mixed picture of the US dollar, and that most of the euro crosses are trading up, we can’t rule out the possibility of quotes rising as far as 1.2340/50.