Euro-dollar’s next move depends on the NFP

Tariffs and rumours of more to come have affected the euro negatively recently although data from the EU in the last few days have generally been strong. Looking at the big picture, though, the difference in rates between the ECB and the Fed is likely to stay similar or possibly increase in the next few months, so that still seems to be the primary driver of euro-dollar’s extended downtrend.

$1.02 seems to be an established support now that this area has been tested twice unsuccessfully, but the 50 SMA from Bands also looks like a possible dynamic resistance since the price failed to break clearly above there on 5-6 February despite extremely high buying volume on Monday 3 February after the weekend’s gap.

For a share under the influence of strong fundamental factors, one would typically expect the main trend to continue after a gap has been closed. This probably doesn’t apply here because of the normally different behaviour of a forex major and because the American job report on 7 February usually has a strong impact on euro-dollar at least in the immediate aftermath. A sustained break above $1.04 would probably need a strongly negative NFP but even in a very positive scenario it’d be unlikely to see a clear new low soon either.

This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.