EURUSD may Retrace Higher in Strong Bearish Trend ahead of NFP and Unemployment report today. As price remains below 1.10, Bearish pressure may continue. Let’s check EURUSD Technical Analysis for more levels and insights.
February 7, 2020 | AtoZMarkets.com – EURUSD is currently heading lower quite impulsively ahead of NFP news today. Though the News have positive forecast for USD but any changed outcome may lead EURO to regain momentum despite the recent Bearish trend.
ECB has been under pressure due to unconventional monetary policy it had in recent years. One of the crucial problem revolves around House prices. As House prices has great influence on consumer’s inflation perception and economic health, so ECB want to have minimal impact on it. Currently, there are only 2 ways for ECB to solve the problem. First, Eurostat to fix the current data and Second, ECB to change it’s inflation measure.
On the other hand, USD has already managed to gain substantial momentum over EURO ahead of NFP today. The reports like NFP, Unemployment Rate and Hourly rate has forecast of positive outcome which can lead USD to sustain the momentum. But any negative result may lead USD to lose significant grounds in the process.
EURUSD may Retrace Higher if NFP turns Negative
Non-Farm Payroll a.k.a. NFP is an important measure for U.S. employment which is closely monitored by investors and traders worldwide. Employment in a country has always been an important factor for a country’s economic health measurement. Ahead of NFP, USD gaining impulsive pressure does indicate the strength of Bears but also leaves a question.
image: EURUSD Daily Chart
According to daily chart, the price moved lower without much of Bullish intervention today. If we monitor a bit closely, the price has not formed a noticeable wick or shadow higher today. After the rejection off 1.11 area earlier, the price has been quite consistent with the Bearish pressure.
EURUSD Bullish Counter may not be a Reversal
The dynamic level’s like 20 EMA, Tenkan and Kijun line has managed to push the price lower as confluence. After the rejection, the price has not much retraced along the way. As a result, the price is residing quite far from the dynamic levels currently. According to Mean Reversion, EURUSD is more likely to revert higher before continuing further Bearish trend in place.
So, despite the current impulsive Bearish pressure, there are certain chance for the price to push higher towards 1.1050 or higher before continuing the preceding trend. As the price reamins below 1.1200 area with a daily close, the Bearish bias may continue to dominate further.
To conclude, EURUSD may continue push lower towards 1.0920 area but certain retracement towards 1.1050 may occur in the process. As the price revert back to the Mean, certain upward pressure may be seen.