EUR/USD Manipulation preordained, now heading to 1.0850!

Dec 9, 2023

The EUR/USD saw a significant decline of more than 0.20%, hitting a daily low of 1.0723 following the release of US Nonfarm Payrolls data. However, the pair managed a slight recovery, reducing losses to 1.0767 after a positive report on the University of Michigan (UoM) Consumer Sentiment. The US Bureau of Labor Statistics reported a robust job market, adding 199,000 employees and reducing the Unemployment Rate to 3.7%. Concurrently, UoM Consumer Sentiment exceeded expectations, despite a decline in inflation forecasts.

During the North American session, the EUR/USD faced downward pressure, touching a daily low of 1.0723 due to disappointing US Nonfarm Payrolls. Subsequently, the pair rebounded as the University of Michigan Consumer Sentiment report surpassed expectations. Currently, the EUR/USD is trading at 1.0747.

The Unemployment Rate dropped to 3.7%, while Average Hourly Earnings remained unchanged at 4%. The US Dollar gained strength post-data release, reflected in a 0.40% increase in the US Dollar Index (DXY) to 103.07.

University of Michigan Consumer Sentiment indicated a positive sentiment among American households, breaking a four-month declining trend. The index rose to 69.4, surpassing the estimated 62.0, while inflation expectations decreased. Americans now anticipate inflation of 3.1% in twelve months, down from 4.5%, and 2.8% for five years, lower than November’s 3.2%.

Looking at the chart, there is an expectation of an upward move towards 1.0850 for the next week. However, the descent and subsequent manipulation were already anticipated at the 1.0726 level. The chart already provides all the necessary information; a thorough price analysis is crucial. Wishing everyone a great weekend, regards from Nicola.