Friday’s headline was without a doubt the release of the US Non Farm Payrolls which posted a higher than estimated value, strengthening the greenback and putting an end to Euro’s rally seen previously during the day.
The pair printed a new high of the year at 1.3915 and is comfortably trading above the 200 Exponential Moving Average and above the previous resistance located at 1.3830. All these bullish factors indicate that higher prices are expected for the pair but an important thing to note is the overbought condition signaled by the Stochastic indicator which is starting to turn downwards above the 80 level, a fact which suggests that price may retrace lower before resuming bullish movement. The first level of interest to the down side is 1.3830 while Friday’s high (1.3915) will most likely act as resistance if touched.
The Eurogroup meetings take place today in Brussels, bringing potential volatility in the market. Although the meetings are closed to the press, sometimes officials speak to journalists throughout the day, a fact which may strengthen or weaken the Euro depending on the matters discussed. Today no high impact indicators are released so we expect a rather slow day if no special developments take place at the Eurogroup meetings.
The pair had difficult to trade movement Friday and the main move was a drop generated by US Dollar strength on the back of better than estimated US employment data.
The latest momentum is bearish but lately the pair is choppy and lacks clear direction. The most recent attempt at breaking 1.6750 resistance resulted in a move lower which is likely to be continued throughout today’s trading session. If this is the case, 1.6640 support is the pair’s first lower target but we anticipate ranging price action until either 1.6750 or 1.6600 is broken decisively.
There are no major economic indicators scheduled for release today, a fact which makes the technical aspect the primary market mover.