EUR/USD move higher stalls at the 100-hour moving average
The pair fell to a low of 1.0767 in overnight trading before pulling off a sharp recovery back above 1.0800 as the dollar fell across the board amid a better risk mood and Fed fund futures mildly pricing in negative rates, causing Treasury yields to fall.
But as the climb higher continues, it is running into a key near-term resistance from the 100-hour MA (red line) @ 1.0849 currently.
Keep below and sellers will maintain a more bearish near-term bias. Break above and the bias will then become more neutral as the battle shifts to territory between the 100-hour MA and the 200-hour MA (blue line) @ 1.0873 instead.
The euro may have its own problems amid the lack of coordinated fiscal action by euro area governments and also the recent rift caused by the German court ruling on the ECB.
But the main focus right now is on the dollar side of the equation as the risk mood is the key driver in the currencies space ahead of the weekend.
The big risk event today will be the US jobs report release but that should not provide much that we don’t already know. Once that is over and done with, we’ll have to see if the market will stick to the more positive mood so far today or run back on potential weekend risks.
That will set the tone for risk trades today and also for EUR/USD as buyers look to challenge for near-term control against the key near-term levels highlighted above.