By Fast Brokers – The EUR/USD is heading lower in the wake of stronger than expected U.S. employment data. The Non-Farm Employment Change came in at -36k, 20k above expectations. Additionally, the headline Unemployment Rate held steady at 9.7% while analysts were expecting a basis point increase to 9.8%. The initial reaction was a Dollar positive since improvements in U.S. employment stokes speculation that the Fed could tighten sooner rather than later. However, investors are supporting the risk trade right now and it will be interesting to see how the trading session plays out. Meanwhile, tensions are building in Greece as the government looks to pass its aggressive austerity package. Although most of the EU has welcomed Greece’s intent to reduce its debt, Merkel is still not wavering. Hence, even though investor uncertainty is beginning to subside the political conflict is still disconcerting. German Factory Orders data was impressive today, printing 2.7% hotter than anticipated. More positive EU economic data helps cool the flames created by Greece and other fiscally troubled European nations. The EUR/USD has managed to hold above its psychological 1.35 level thus far, and it will be interesting to see if the currency pair can continue to form a base above February lows. Data is done for the week, meaning currencies will likely play off of U.S. employment data for the remainder of the trading session. The EU will start off the week with Industrial Production on Monday. Though the next week is relatively light on the data front, there remains the possibility of new psychological flares from indebted nations.
Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/3and 2/26 highs. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/3, 2/26, and 3/1 lows. Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.
Present Price: 1.3554
Resistances: 1.3557, 1.3574, 1.3589, 1.3606, 1.3619, 1.3654
Supports: 1.3542, 1.3528, 1.3511, 1.3494, 1.3460, 1.3436
Psychological: February Lows, 1.35
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