EUR / USD holds below 1.2000 but price action centers around its 100-day moving average ahead of non-farm payrolls
The sellers kept the breakout down below support @ 1.2059-64 earlier in the week and even pulled out the 1.2000 handle in trading yesterday.
However, the 50.0 retracement level of the upward November swinging move and the 100 day moving average (red line) @ 1.1967-76 is now getting additional support.
This is the key region to watch heading into the final stages of the week, as the dollar trades at a two-month high ahead of the nonfarm payroll report later today.
Even if one wants to argue for / against the strength of the dollar at this point, the charts continue to tell the story of trading this week – as it is for the most part.
In the case of the rising dollar, I would say it depends on a breakout of EUR / USD below the support region currently highlighted above.
As for buyers, holding above and pushing back above 1.2000 would be the first step in trying to break the recent dollar resurgence to start the new year.
That said, a further downside breakout from now will only exacerbate dollar gains even further in the coming sessions, with little pullback in EUR / USD towards the 1.1888-00 region.
This means that if the dollar extends its course higher from here on out, expect the gains to be sharper across the board as more technical levels give way.
Another moving element to consider is the technical breakdown in EUR / GBP below 0.8800 currently. This opens up a potential move to April-May lows of last year around 0.8671-82 and which could push EUR / USD down again.