EURUSD: Euro Holds Near Resistance Awaiting New Drivers

All major currencies showed gains against the US currency heading into the weekend. The leader board was topped by the euro (+0.79%), the British pound (+0.71%), the New Zealand dollar (+0.70%), the Swiss franc (+0.70%), the Australian dollar (+0.13%), the Japanese yen (+0. 11%) and the Canadian dollar (+0.08%).

On Friday, January 22, all major currencies closed in the red, while the euro closed in positive territory. The single currency drew support from euro crosses throughout the day. By the end of the session, the EURUSD pair increased by 0.07% to 1.2170. The euro locked in gains during the European session after macro data came out of Germany. Investors were pleased to note that the lockdown exerted only a slight impact on business activity in the country.

Eurozone business activity fared only a bit worse than the previous readings, but this could not change market sentiment due to weak data points out of the UK (retail sales as well as manufacturing and services PMIs), which pushed the euro up through the EURGBP cross.

During the North American session at 14:45 GMT, strong Markit US manufacturing and services PMI readings came out. The index of business activity in the service sector in January reached 57.5 (vs. the 53.6 forecast). The index of business activity in the manufacturing sector for the same period clocked in at 59.1 (vs. 56.5). Both data points exceeded market expectations and the previous readings, reminding investors that the US economy continues to recover even as the pandemic resumes. But even this data failed to halt euro buying.

Today’s macro agenda (GMT+3)

  • 12:00 Germany: IFO business climate, IFO current conditions, IFO expectations (January)
  • 11:45 and 19:15 Eurozone: ECB President Christine Lagarde speech

1

Current outlook

At the time of writing, the euro was trading at 1.2160. The main EURGBP cross is still on the buy-side. Major currencies are all trading in positive territory. Today’s top performers include the Aussie (+0.48%), the kiwi (+0.32%), and the sterling (+0.31%). These currencies experienced a pullback near the end of the week amid risk aversion, and today they are showing a correction.

1 2
View single page >> |

Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.