EUR/USD Holds Resistance, AUD/USD In Focus Ahead Of RBA

US EQUITIES HOLD KEY RESISTANCE AFTER ANOTHER STRONG NFP

Last week ended with a strong headline NFP print as the US economy added more than 300k jobs for the month of January. This was partially offset by a rather large revision to the prior month to go along with a miss on Average Hourly Earnings; but given that this print was released on the heels of another set of dovish hints from the Federal Reserve, the backdrop appeared accommodative for an extension of the 2019 risk rally. As the door has opened into February, both the Dow and S&P 500 are holding resistance at an interesting spot on the charts, as taken from 78.6% Fibonacci retracements produced by the December sell-offs in each market. The big question is for how long this resistance might hold, and whether this can produce a pullback deep enough to re-open the door for bullish trend strategies in US stocks.

Below is the four-hour price chart of the Dow Jones Industrial Average, with a focus on two different areas of support potential. The nearer zone around 24,722 is the 23.6% retracement of the post-Election move in the index; and a little lower is the 61.8% marker of the December sell-off, a level that’s already been tested multiple times for higher low support in the Dow. If this level cannot hold, that bullish bias may come into question but, until then, a continued build of higher-low support can keep the door open for topside strategies.

DOW JONES EIGHT-HOUR PRICE CHART: 78.6 RESISTANCE HOLDS THROUGH NFP

(Click on image to enlarge)

DJIA Dow Jones Eight Hour Price Chart

THIS WEEK’S ECONOMIC CALENDAR

This week brings a number of high-impact releases on the economic calendar with Central Bank rate decisions set to take place out of Australia, Mexico, and the UK. On the data front, US ISM is set to be released tomorrow morning and New Zealand employment figures are on deck for Wednesday. Mexico CPI is released on Thursday morning, ahead of the Banxico rate decision taking place later in the day; and the week closes with a look at Canadian employment numbers due to be unveiled on Friday morning.

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