By Fast Brokers – The EUR/USD is strengthening in reaction to a weaker than expected Employment Change figure. Since the Dollar rallied after the turnaround in employment data in December, it seems reasonable that the Greenback is falling across the board in reaction to today’s release. Additionally, it will be interesting to see the EUR/USD log further gains today considering the level of anticipation heading into today’s data set. On a positive note, the headline Unemployment Rate did remain at 10% and analysts were expecting a basis point increase to 10.1%. As for the EU, the Union’s headline Unemployment Rate also printed at 10%, a basis point higher than analyst expectations. Furthermore, German Industrial Production came in 4 basis points below analyst expectations. Hence, EU economic data has started 2010 off on a sour note, and today’s data set has yielded a relative weakness in the Euro as exemplified by a dip in the EUR/GBP. Regardless, the Dollar could remain under selling pressure across the board due to today’s negative development in regards to U.S. employment.
Technically speaking, the EUR/USD still faces multiple downtrend lines along with the psychological 1.45 level, 1/05, 12/23, and 12/18 highs. Hence, some challenging near-term topside technicals are in place due to the EUR/USD’s downturn in December. As for the downside, the EUR/USD has technical cushions in the form of our 1st and 2nd tier uptrend lines along with intraday and 1/04 and 12/22 lows. The EUR/USD is still trading well below our 3rd tier uptrend line that runs through July lows. However, it will be interesting to see whether today’s disappointing U.S. jobs data provides enough of a topside boost to get the EUR/USD back above our 3rd tier uptrend line. On an encouraging note, the EUR/USD is setting higher lows, creating the possibility for a new base.
Present Price: 1.4333
Resistances: 1.4364, 1.4400, 1.4418, 1.4439, 1.4458, 1.4489
Supports: 1.4321, 1.4300, 1.4267, 1.4235, 1.4216
Psychological: 1.45, 1.40, December and September Lows
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