EUR/USD holds below 1.2000 but price action centers around its 100-day moving average ahead of non-farm payrolls
Sellers have kept with the downside break below support @ 1.2059-64 earlier in the week and even took out the 1.2000 handle in trading yesterday.
However, there is some added support from the 50.0 retracement level of the November swing move higher and the 100-day moving average (red line) @ 1.1967-76 now.
That is the key region to watch ahead of the closing stages of the week as the dollar trades to a two-month high ahead of the non-farm payrolls report later in the day.
As much as one wants to argue for/against dollar strength at this point in time, the charts continue to tell the story in trading this week – as it has for the most part.
In the case of the dollar’s upside run, I would argue that hinges on a break of EUR/USD below the support region currently highlighted above.
As for buyers, holding above that and pushing back above 1.2000 would be the first step in trying to break the dollar’s recent resurgence to start the new year.
That said, a further break to the downside from hereon is likely to only exacerbate dollar gains even more in the coming sessions with little in the way of EUR/USD from pushing back towards the 1.1888-00 region next.
What that means is that should the dollar extend its run higher from hereon, expect gains to be sharper across the board as more and more technical levels give way.
Adding to that will be a potential run in USD/JPY above its own 200-day moving average.
Another moving part to be mindful about is the technical breakdown in EUR/GBP below 0.8800 currently. That opens up a potential move towards the lows from April to May last year at around 0.8671-82 and that could spell further downside for EUR/USD.