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EUR/USD Daily Forecast – Euro Battling 1.1100 Resistance

By:
Jignesh Davda
Updated: Dec 5, 2019, 09:00 UTC

Upward momentum in EUR/USD has subsided in the early week as the pair struggles to cross over the 1.1100 handle.

EUR/USD

Market Participants Await Friday’s NFP Report

After a few market-moving data releases yesterday, the economic calendar is relatively light for EUR/USD until tomorrow. Friday’s US jobs report should trigger some volatility in the FX markets.

EUR/USD prices attempted to push higher on Thursday after the ADP reported weaker than expected job growth. The report reflected 67,000 additional workers last month while analysts were looking for a gain of 137,000.

But the data-induced rally was short-lived and the currency pair gave up the days gain shortly after the ISM non-manufacturing PMI data release. The figure came in softer than expected in November although not by a large margin. Further, the report points to a 1.9% growth in GDP which was encouraging. Reports released earlier in the week for the Euro area suggested GDP growth of 0.1% in comparison.

Despite the soft ADP report, analysts are still expecting the NFP report to reflect 186,000 thousand workers in November. This is only slightly lower from the 189,000 expectation at the start of the week. Further, the unemployment rate is expected to stay unchanged at 3.6% and average hourly earnings should tick up to 0.3%.

Technical Analysis

With a notable decline in FX volatility as of late, EUR/USD is seen trading in small ranges more often, and that is exactly what the pair is doing now.

The 100-day moving average has contained the downside in the pair. At the same time, the pair has struggled to rally above the 1.1100 level, similar to what happened in around the middle of November.

EURUSD Daily Chart

My expectation is for the pair to continue within this range, considering the relatively light economic calendar. It seems more likely that a range break will come on the back of Friday’s NFP report.

Nevertheless, if we start to see some upward momentum, the level I’m watching for resistance falls at 1.1129. To the downside, support remains at the 100-day moving average. The indicator currently trades falls at 1.1067.

Bottom Line

  • EUR/USD made a failed break above 1.1100 yesterday to fall back within the range that has contained it for most of the week.
  • The 100-day moving average has been holding the pair higher and this level remains important downside support.
  • Friday’s NFP report is likely to accompany volatility. This report might offer a catalyst for a range break in the pair.

About the Author

Jignesh has 8 years of expirience in the markets, he provides his analysis as well as trade suggestions to money managers and often consults banks and veteran traders on his view of the market.

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