January 6 currency market watch: technical analysis of the euro, pound and yen

By    6 Jan,2023

Currency: EUR/USD


Resistance level 2: 1.0630

Resistance level 1: 1.0550

Spot Price: 1.0521

Support level 1: 1.0500

Support level 2: 1.0460

The dollar index hit a four-week high on Thursday (Jan. 5), rising 0.83 on the day, with the index peaking at 105.28. The ADP National Employment Report, released a day before Friday's much-anticipated December jobs report, showed that private employment rose by 235,000 jobs in December. Economists polled by Reuters had previously forecast an increase of 150,000. Also, initial jobless claims fell to a three-month low last week, while layoffs fell 43 percent in December. "(The) good news (on the data front) is 'bad news' for stocks, but good news for the dollar," said Joe Manimbo, senior market analyst at Convera in Washington, D.C. "The economy showed surprising momentum at the end of the year, keeping hopes of a soft landing intact and underscoring the prospect of the Fed keeping interest rates higher for longer." The euro ended the day 0.74 percent lower against the dollar on Thursday at $1.0526, after falling as low as $1.0515, the lowest since Dec. 12. Friday's U.S. jobs and payrolls data for December is the main economic focus of the week, with investors now judging how high the Federal Reserve is likely to raise interest rates and how long they will stay there. So the dollar is expected to remain strong until the data is released. On the current daily chart, EURUSD continues to be in the lower Bollinger band and technical indicators continue to diverge downward, indicating that the short side of the euro is starting to strengthen. Pay attention to the support of the 1.05 integer mark in the near future, if it falls below, the downside of the euro will increase.

Currencies: GBP/USD

Resistance level 2: 1.2100

Resistance level 1: 1.2000

Spot price: 1.1920

Support level 1: 1.1900

Support level 2: 1.1815