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EUR/USD consolidates at daily highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Córdoba) - EUR/USD has entered a consolidation phase at daily highs after climbing nearly a hundred pips throughout the day, underpinned by the risk-off mood and supportive Eurozone data.

    Chinese turmoil has been the theme of the day and sparked risk aversion across financial markets after China’s stock trading was interrupted for the second time this week when the 7% circuit breaker was hit. Later on the day, China Securities Regulatory Commission announced it was suspending the stock circuit breaker rule.

    Against this backdrop, EUR/USD climbed to a 3-day high of 1.0874 before losing momentum just ahead of the 10-day SMA and settling in a range. At time of writing, the pair is trading at 1.0865, recording a 0.79% gain on Thursday.

    Focus now turns to US nonfarm payrolls report to be released on Friday, which is expected to show the economy added 200K new jobs in December. Still with a solid employment sector, now Fed officials seem more concerned about low inflation to determine future rate hikes.

    EUR/USD technical levels

    As for technical levels, if EUR/USD breaks above the 1.0874/76 area (Jan 7 high/10-day SMA), next resistances are seen at 1.0905 (20-day SMA) and 1.0990 (Dec 28 & 29 highs). On the other hand, immediate supports could be found at 1.0820 (50-day SMA), 1.0770 (Jan 7 low) and 1.0710 (Jan 5 low).
    For more information, read our latest forex news.

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