The daily chart (see below) clearly shows the 1.4730 area as support/ resistance zone (Sep swing high / Oct-Nov swing low). The daily long-term uptrend is still intact. Positive economic news could trigger risk appetite leading to investments in growth assets / currencies, resulting in a lower USD/ higher EUR.
However, the fall under the 20 day simple moving average and the fall initiated by the NFP data created a short-term downtrend (see 1hr chart below). Also the mantra of the past months “better economy > more risk appetite -> lower USD” might not continue indefinitely. The US NFP results (-10k jobs instead of the predicted -100k) were a first indication of that change. More positive US data could trigger a market opinion that US interest rates might rise earlier than currently expected. That would lead to higher USD -> lower EUR/USD.
Currently the direction is not clear. But the longer the EUR/USD stays within the 1.4730 range, the stronger the breakout will be. In which ever direction it will go. I will stay sidelined for now and go with the trend if a strong breakout moves prices out of the 1.4690 – 1.4760 range. Don’t get caught on the wrong foot!
EUR/USD - daily
EUR/USD - 1hr
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