The euro has climbed to the top of the range and the markets are waiting in anticipation for the Fed’s move in the coming weeks. Although the euro has strengthened, it still stays in the range which has been set last week and it remains to be seen if it can break through the range anytime soon. Support is set at 1.24, resistance at 1.25.
The EUR/USD pair has strenghtened amid the weakening of the dollar in the last 24 hours. The dollar index, tracking the greenback against six major currencies was nearly flat, but it’s still down 0.4 percent for the week. The Federal Reserve didn’t decide to make any changes in the interest rates on Wednesday, but many market participants are convinced that a rate hike is coming in March.
It may seem that the dollar should enjoy stronger investor sentiment, but at this moment they are focused on the euro zone. Data released on Thursday showed that the manufacturing boom continues and supported the expectation that the European Central Bank will be normalizing its monetary policy. The euro is up 0.5 percent this week.
Today, markets will again turn their focus to the events in the US, where non-farm payrolls numbers wil be released during the day. Last month, jobs increased by 148k. According to a Reuters survey of economists, non-farm payrolls probably rosa by 180k in January.
Pic.1. EUR/USD chart.
We won’t see any influential data in the euro zone today, and the markets will turn their focus on data from the US. Non-farm payrolls will be the most important ones. A strong reading may support the greenback, but any kind of disappointment may trigger another leg of the euro’s rally.