EUR/USD: Euro may blossom this month
US employment figures are finally out, giving the EUR a onetime chance to recover the ground lost since the year started: the US created just 74K new jobs, and while unemployment rate decreased to 6.7%, closing in on the 6.5% FED’s threshold to consider raising the Fed funds rate, dollar fell down across the board.
Why? Because the decreasing unemployment rate, is a consequence of the labor force participation rate tumbling to 62.8%, its worst level since January 1978. And despite the FED has been firmly ignoring the number, market players can’t see how, now, the Central Bank will be willing to continue removing facilities programs.
The EUR then, can blossom again, particularly as this week low against the dollar found support to the tip in a still bullish 20 SMA. Also, the daily chart shows price managed to held this week above a daily ascendant trend line coming from past July low at 1.2754, now around 1.3560. In this same time frame, indicators hold below their midlines, albeit lost their downward potential and turned higher, approaching their midlines, while 20 SMA offers now dynamic resistance around 1.3690: this is then the first level to overcome to confirm more EUR/USD gains, looking for a probable retest of the monthly descendant trend line coming from its all time high of 1.6038, now around 1.3860.
As for the downside, as long as the mentioned ascendant trend line holds, buyers will dominate the scene, maintaining the buy-the-dips game alive.