The EURUSD pair witnessed a long-running bearish trend – the longest since November. And though the major is attempting to recover and trades in the green at the 1.0955 level, it’s too early to bet on any kind of a solid recovery.
On Friday morning, the shared currency was first affected by weak data from Germany. The Industrial Production contracted to -3.5% versus -0.2% expected and became another confirmation of bleak perspectives in counrty’s manufacturing sector. Then EURUSD remained under pressure below the key mark 1.10.
However, in the evening the things worsened. The highly anticipated US Non-Farm Payrolls in January beat the forecast of 165K and rose to 225K. Moreover, the annual Average Hourly Earnings arrived at 3.1%, bettering the expectations of 3.0%. The US Dollar got boosted by the report and reached the levels near four-month highs. Subsequently, the EURUSD pair hit the lowest levels since October 2019 and closed the day in the red near the 1.0950 mark.
On Monday, China’s National Health Commission reported that the coronavirus death toll climbed to 908 while more than 40 thousand people were infected. The number of affected people is rising as well as the fears that the new epidemic may be more dangerous and far-reaching than SARS that raged in the 2000s and killed 774 people then. Such news didn’t bring any relief to the major and it continued to trade near Friday’s lows in the 1.0950 region.
Today, the European session is expected to be quiet as the EZ doesn’t publish any significant reports while the second-tier Sentix Investor Confidence for February will hardly affect the trading much. In the NA docket, the Fed’s Bowman speech is scheduled though it’s not an important and long-awaited event either. Thus, the major’s dynamics will be mostly defined by the market sentiment.
From the technical point of view, the EURUSD pair stays in a tight range of $1.0940-50. On the 1-hour chart the major sits below its SMA200 (today at $1.1020) while on the 4-hour chart it remains below its SMA200 (today at $1.1100). The support is at $1.0940, $1.0905 and $1.0880 while the resistance awaits at $1.0975-85, $1.1010-20 and $1.1045. Amid low market volatility on Monday the major will likely stick to the familiar range below the key 1.10 mark.