EUR/USD Support Turned Resistance at Parity

EURUSD is still in correction mode and is pulling up closer to the area of interest at parity or 1.0000. The Fibonacci retracement tool shows additional resistance zones.

The pair is currently testing the 38.2% Fibonacci retracement level around the .9800 major psychological level but might still be due for a higher correction. The 50% Fib is at .9887 and the 61.8% level is at the .9950 minor psychological mark, which is close to a falling trend line.

In addition, the 50% Fib is near the 100 SMA dynamic inflection point while the 61.8% level lines up with the 200 SMA dynamic resistance. If any of these hold as an upside barrier, EURUSD could resume the drop to the swing low at .9530.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. Stochastic is also turning lower after reaching the overbought area, reflecting a pickup in selling pressure.

RSI looks ready to turn south without reaching the overbought zone, suggesting that sellers are eager to take over.

Final manufacturing PMI readings are due from the eurozone region today, but the main catalyst for this pair might be the US ISM manufacturing PMI. Traders are likely to pay close attention to the jobs component, as this could contain clues for the NFP report.

Other leading indicators due throughout the week might also impact USD price action leading up to Friday’s NFP release. Analysts are expecting to see a 265K increase in hiring, slower than the earlier 315K gain.

A stronger than expected figure, however, could bolster Fed tightening hopes once more. Recall that the US central bank already hiked by 0.75% three times in a row, so a fourth could be likely if jobs data comes in strong.

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