For the first time since Dec. 2014, EURUSD pair closed highest, above 1.25 level. what’s next? Read on to get more on the 2 February EURUSD Technical Outlook.
2 February, GKFX – EUR/USD closed above 1.25 for the first time since Dec. 2014. The bid tone around the EUR strengthened reportedly due to the news that some ECB officials are calling for a clearer interest rate guidance. Also, ECB’s Nowotny said the bank could consider ending its QE program.
- Euro closed yesterday above 1.25.
- Hawkish ECB sound bites support EUR.
- Focus on US wage growth number.
All eyes on US wage growth figure
“The focus will be on wage growth and the unemployment rate. The unemployment rate is expected to remain unchanged, but wage growth could slow after rising 2 months in a row”,
Kathy Lien from BK Asset Management said.
Despite being overbought (as per the daily RSI), the EUR/USD could rise well above 1.2549 (monthly 100-MA) if the US wage growth number disappoints expectations. A move to 1.25 has already revived interest in EUR calls.
Meanwhile, a pullback could be seen if the US wage growth and NFP beat estimates. That said, the dip could be short-lived. Lien says, “there should be significant buyers between 1.2250 and 1.2350.”
2 February EURUSD Technical Outlook
The spot traded just below 1.25 in Asia. Short-term technical readings continue indicating that the upward momentum is limited, mostly due to the pair being ranging ever since the day started. Nevertheless, it remains above the 23.6% retracement of its January rally, and in the 4 hours chart, is now moving away from its 20 SMA for the first time this week.
Technical indicators in the mentioned chart lack upward strength but hold within a positive territory. The multi-year high of 1.2535 is a key resistance for this Friday, as a break above the level on poor US data, will likely see the pair nearing 1.2600 ahead of the weekly close.
Support levels: 1.2440 1.2400 1.2360
Resistance levels: 1.2500 1.2535 1.2580
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