On Friday the 26th of January, trading on the euro closed up. The euro rose against the dollar during the Asian session before erasing all it gains in the US. The dollar rose across the board, ignoring the weak US GDP data for the 4th quarter.
GDP figures came out lower than the estimates and the reading for the previous quarter was revised downwards, which is a negative for the dollar.
These negatives were cancelled out by the index for durable goods orders, which came out much better than expected, as well as the rise in US 10Y bond yields. The pair dropped from a high of 1.2494 to 1.2406 (-88 pips).
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
My predictions for Friday came off in full. At the time of writing this review, the euro is trading at 1.2411. Buyers were met with resistance around the 1.24 region, through which the upper line of the recently broken B-B channel runs.
The daily candlestick has a bullish body and a long wick. This is the second candlestick with a long shadow that we’ve seen in recent times. These suggest a strong resistance around 1.25, so we’ll most likely see a correction on the euro ahead of Friday’s payrolls.
Trader attention this week will turn towards the upcoming FOMC meeting and Friday’s payrolls report for January.