Eurusd rises as euro stabilization contrasts with US labor and manufacturing challenges

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.24%	24.8 Pips
Week to-date	-0.62%	-65.1 Pips
February	0.05%	5.2 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

The Euro Area’s Producer Price Index (PPI) for December remained unchanged at 0%, improving from a previous decline of -1.2% in November, as reported by Eurostat. The 1-month PPI also experienced a decrease from 1.6% to 0.4%, reflecting a slowdown in price growth. Further, the 12-month PPI reported a marginal improvement from its November value of -1.2% to 0% in December. Despite these mixed signals, the stability at 0% for the broader 12-month period suggests signs of stabilization within the Euro Area’s industrial sector.

In the United States, the Job Openings and Labor Turnover Survey (JOLTS) highlights a contraction in job opportunities, with job openings decreasing from a revised 8.156 million in November to 7.6 million in December. This drop indicates a cooling in labor market demand. Additionally, new orders for manufactured goods further declined by 0.9% in December after a 0.4% fall in the previous month. The manufacturing sector is showing signs of reduced momentum, with a downward revision of November’s figure from an initial -0.4% to -0.8%, underscoring persistent challenges in industrial activity.

The economic data from both the Euro Area and the United States present a complex picture for the EURUSD exchange rate. The Euro Area’s producer prices suggest stabilization, but with minimal growth, while the U.S. on the other hand reflects weakening labor and manufacturing sectors. The rise in the EURUSD rate by 0.24% on Wednesday to 1.04025 indicates a relative strengthening of the Euro against the Dollar, likely fueled by softening U.S. economic data. However, upcoming U.S. economic indicators, particularly the Nonfarm Payroll Employment report, anticipated later in the week, could exert substantial influence on market sentiment and future EURUSD movements. Consequently, traders might remain cautiously optimistic for the Euro, monitoring further economic developments from both regions.

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What can we expect from EURUSD today?

EURUSD on Wednesday rose 0.24% to 1.04025. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Wednesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.04402 with break above could target R2 at 1.0478 or figure level area. While towards the downside, we are looking at daily low of 1.03693 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.04425 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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