Euro Weakens after Upbeat US Job Data

The Euro (EUR) inched lower against the US Dollar (USD) on Friday, decreasing the price of EURUSD to less than 1.1850 following some key economic events. The technical bias has turned bullish because of a higher high in the recent upside rally.

EUR/USD Technical Analysis

As of this writing, the pair is being traded near 1.1849. On the upside, a hurdle may be noted around 1.2100 (a short-term horizontal resistance area as well as psychological number) ahead of 1.2176 (a major horizontal resistance) and then 1.2200 (the psychological number). The technical bias shall remain bullish as long as the 1.0839 support area is intact.

On the downside, a support can be noted around 1.1632 (a key horizontal support) ahead of 1.1629 (the low of the last major downside move) and then 1.1600 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart.

US Jobless Claims Data

The U.S. economy grew at its fastest pace in more than two years in the third quarter, powered by robust business spending, and is poised for what could be a modest lift next year from sweeping tax cuts passed by Congress this week.

In a separate report, the Labor Department said initial claims for state unemployment benefits rose 20,000 to a seasonally adjusted 245,000 for the week ended Dec. 16.

Last week marked the 146th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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