EUR/USD plunged as the Dollar Index has jumped higher. The USD was boosted by better than expected data and it could resume its appreciation if the DXY reached new highs. The currency pair has shown some exhaustion signs lately, so the current drop is understandable.
The US Non-Farm Payrolls was reported at 943K versus the 870K estimate and versus the revised 938K in the previous reporting period. The Unemployment Rate dropped more than expected, from 5.9% to 5.4%, the specialists have expected a drop only to 5.7%.
Moreover, the Average Hourly Earnings increased by 0.4% versus 0.3% expected. All these economic data have lifted the greenback versus its rivals.
EUR/USD Almost To Reach Support!
EUR/USD is almost to reach the 88.6% retracement level after ignoring the weekly S1 (1.1784). Its failure to reach the 61.8% retracement level or to stabilize above the 1.19 psychological level signaled a potential decline.
Technically, the 50% Fibonacci line of the descending pitchfork is seen as potential dynamic support. The 88.6% represents strong static support, you can see that this level has stopped the price in the past.
Forecast!
We'll have to wait to see how the price reacts around the 88.6% level. A bullish pattern here could bring us a new long opportunity. A false breakdown with great separation of a major bullish engulfing could signal a rebound.
The material has been provided by InstaForex Company - www.instaforex.com