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EUR/USD Turns Red, Support Turned Resistance

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Aayush Jindal

Key Highlights

  • EUR/USD broke the key 1.2000 support zone and extended its decline.
  • GBP/USD settled below the 1.4000 support and declined towards 1.3800.
  • USD/JPY surged to a new multi-week high above 108.00.
  • The US nonfarm payrolls increased 379K in Feb 2020, whereas the market forecast was 182K.

EUR/USD Technical Analysis

After struggling to surpass the 1.2100 resistance, the Euro reacted to the downside against the US Dollar. EUR/USD broke many supports near 1.2000 to move into a bearish zone.

Looking at the 4-hours chart, the pair gained momentum after it broke the 1.2000 level. There was also a close below the 1.2000 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even broke the 1.1955 support zone and traded towards 1.1900. It is currently consolidating losses, with an immediate resistance at 1.1940.

The first major resistance is near the 1.1955 level (the previous support). The main resistance is now forming near the 1.2000 level. It is close to the 50% Fib retracement level of the downward move from the 1.2113 high to 1.1892 low.

On the downside, an immediate support is near the 1.1880. Any more losses could lead EUR/USD towards the 1.1840 support zone.

Fundamentally, the US nonfarm payrolls report for Feb 2021 was released on this past Friday by the US Bureau of Labor Statistics. The market was looking for an increase of 182K.

The actual result was much better than the market forecast, as total nonfarm payroll employment rose by 379K in February 2021. The unemployment rate also dipped from 6.3% to 6.2%.

Overall, EUR/USD remains at a risk of more downsides below 1.1880 and 1.1860. Conversely, USD/JPY extended its surge and traded to a new multi-week high above 108.00.

Economic Releases

  • Germany’s Industrial Production for Jan 2021 (MoM) - Forecast +0.2%, versus 0% previous.
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