The EUR/USD cross currency pair remains under heavy selling pressure and remains below all of its major moving averages. As of today’s data, the 20-period Simple Moving Average (SMA) is below the 100-period SMA. It does remain above the 200-period SMA. This sudden and unexpected shift in configuration has produced a difficult environment for the euro against the US dollar. Traders should approach strong resistance zones with caution.
At the moment, the EUR/USD pair meets resistance at 1.1695, where the 200-day moving average lies. This barrier is unexpected and depressing to any upward movement. In addition, the 100-period SMA is located at 1.1740, strongly limiting any bullish power for the currency pair. As RSI reached overbought levels, the situation is further complicated as the 20-day SMA currently nearby 1.1739 strengthens a nearby resistance area around 1.1740.
To the downside, the EUR/USD is finding support above a horizontal 100-day SMA at 1.1667. The weeklies bottom at 1.1659. Should this key support level be broken, further downside for the pair could be much steeper. As it stands, sellers are aggressively probing this weekly low, bringing further bearish euro pressure.
On balance, the momentum indicators continue to support a bearish sentiment in the market. The Momentum indicator is still flat though – below the zero line – meaning there’s no upward momentum for the euro yet. Relative Strength Index (RSI) which is at 37 and trending down towards 42 – the overbought and oversold thresholds. While this indicates the pair is heavily oversold, it isn’t reflecting indications of a strong bounce in the short term.
On a month-to-month basis, US-based employers announced 35,553 job cuts in December. This is a notable drop of 50% compared to the 71,321 job cuts announced in November. That’s the smallest monthly total since July 2024 when 25,885 job cuts were announced. These employment statistics are remarkable. They’re indicative of an encouraging stabilization in the labor market, which may affect future monetary policy decision-making by the Federal Reserve and, thus, currency valuations.
The employment data will be very important to shaping market expectations around where interest rates are going. It will influence how we view economic growth in the United States. Traders are parsing these figures carefully. They will want to watch closely to see how it meshes with ongoing market dynamics and flows for the EUR/USD pair.
In conclusion, prudence should be a watchword for traders and investors as they move through this sea of technical indicators and economic news. EUR/USD The resistance levels in this popular currency pair are firmly entrenched. At the same time, recent U.S. employment trends indicate that volatility may remain a threat in the short term.