schmoozemag.com – Viral : Solid US NFP And Greek Anxiety Again Pressure The Euro
On Friday, the dollar recovered over the weekend as the US labor market improved. The Labor Department reported nonfarm payrolls in January at 257,000, beating the 236,000 forecast by economists. Normal hourly earnings in the US rose to 0.5%, compared with the previous estimate of 0.3%. If the unemployment rate was 5.7% in January, it was no better than the previous period’s 5.6%. Despite a slight increase, the US unemployment rate remains bearish. A series of US business data showed solid job growth and a strong recovery in wages. More than 1 million jobs were added last quarter, the first since late 1997. It was also at the center of speculation that the Fed would start raising the benchmark interest rate in mid-2015. The strength of the dollar suddenly weakened its counterpart, the euro. After Friday’s release of US labor market data, the euro dropped by 1,600 points. The euro also came under selling pressure on concerns that the newly elected Greek government has set a deadline for extending its bailout.
Greek Finance Minister Yanis Varoufakis did not agree at Wednesday’s meeting with eurozone partners to continue the global bailout program. Instead, Greece will seek a “span deal” to keep its finances afloat until the country is ready to introduce reforms to its new debt program. Greece will continue to meet its obligations to its partners and creditors in the euro area, as agreed by the previous government.
On the hourly chart (H1), the EUR is currently in a triangle shape. Given that the RSI indicator shows that the euro is ready for a rally, the market is likely to see the 1.12950 level as the main support level for now. The euro is likely to rise to 1.13960 – 1.14960 in the short term. A cautious break below 1.12950 should take the euro down to 1.10940.