The Fed to Decide the Oil Market’s Future
The oil prices rally and world central banks’ dovish monetary policy caused by the Covid-19 pandemic were the main reasons for current inflation growth…
EUR/USD: trading sideways
2020-08-07 • Updated
The pair bounced off the key resistance at 1.1900. All eyes on the NFP.
Fundamentals
The overall trend of EUR/USD has been bullish since the middle of March. The main reason for that rally has been the weak greenback. Why does the USD continue dipping? Firstly, investors avoid it as yields are decreasing in the USA. Secondly, Democrats and Republicans can’t make an agreement on the fiscal stimulus. This uncertainty weighs on the USD. Finally, the ADP report yesterday turned out much worse than analysts expected. Employment rose only by 167 000, while analysts predicted 1.2 million. Quite a huge gap! The data proves that the US labor market is still suffering from the coronavirus pandemic. As a result, investors anticipate that NFP will be worse than the forecasts tomorrow.
However, it seems that the upside rally has slowed down. The pair has been risen not as steeply as before. Nevertheless, most analysts have bullish prospects on the euro. It may be just a natural correction. After it, the pair should continue edging up again. It hasn’t been any important economic events for the euro on the calendar this week. The pair is mainly driven by the news from the USD side.
Follow news
Watch out the US NFP report on August 7 at 15:30 MT time! If the NFP is worse than the forecasts, the USD will fall, therefore, EUR/USD will rise. Otherwise, if the NFP is better than the forecasts, the USD will increase, therefore, EUR/USD will decrease.
Technical tips
EUR/USD is trading above the 50, 100, and 200 moving averages. Thus, the impetus stays to the upside. The RSI indicator is below 70, that means the pair isn’t overbought yet. If EUR/USD breaks out the resistance at 1.1900, it will surge higher to the key psychological mark at 1.2000. Otherwise, it may meet the support at the 61.8% Fibonacci retracement level at 1.1820. The move below this level will push the price to the next support at 1.1740.
Similar
Why Didn't Oil Prices Calm Despite OPEC+ Attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
What is going on with gas?
What is going on with this energy asset these days, and should we prepare for further falls?
Latest news
What can drive oil below $90 a barrel?
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
China-Taiwan Conflict to Destroy the Markets
China may respond to US House Speaker Nancy Pelosi's visit to Taiwan with military provocations, including firing missiles near Taiwan or large-scale air or naval activities…
How Alibaba Deals with Troubled Times?
The e-commerce giant has recently faced a lot of pressure, starting from global uncertainty in China amid lockdowns and geopolitics. The company has been added to the US SEC (Securities and Exchange Commission) delisting queue. Finally, there’s an earnings report coming on August 4. Let’s discuss everything and prepare for the next move.
