EUR/USD: Weekly Technical Analysis For June 8-12, 2015

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Fundamental Analysis:

The Euro fell sharply against the U.S dollar on Friday extending losses from the previous session, as positive U.S. jobs data reinforced the notion that the Federal Reserve could institute its first interest rate hike in nearly a decade at some point this year.

The pair moved lower in U.S. morning trading after the U.S. Bureau of Labor Statistics released better than expected job figures for the month of May. Last month, U.S. non-farm payrolls soared by 280,000, far exceeding analysts’ low end of forecasts for a 220,000 gain. Private payrolls increased by 262,000 in May, as professional business services added 63,000 positions on the month. The labor market also added 17,000 construction position, following a significant gain of 35,000 a month earlier.

More importantly, average hourly wages surged by 0.3% on a month-to-month basis up from a 0.1% increase in April. The Fed would like to see robust wage growth and inflation move toward its targeted goal of 2% before it institutes its first interest rate hike in nearly a decade.


Meanwhile the two sides in the Greek Debt negotiations failed to reached an agreement on Friday. Earlier this week, France president Francois Hollande said Greece and its international creditors appeared to be hours from reaching a deal on agreement that could unlock critical aid to the beleaguered nation. Greece prime minister Alexis Tsipras, though, may have rankled creditors on Thursday by bundling four separate obligations to the IMF into one repayment at the end of this month. In doing so, Greece delayed repayment of a €300 million payment due on Friday.


Technical Analysis:

The pair’s rise from 1.0818 was limited at 1.1378 forming a resistance. Initial bias this week is neutral, though i will be favoring the downside for a retest of 1.0818. However, rise from 1.0461 could still be in progress. Above 1.1379 temporary top will target 1.1466 and above. But after all, such rise is viewed as a corrective move. Hence, in that case, we’d expect strong resistance from 38.2% retracement of 1.3993 to 1.0461 at 1.0181 to bring reversal. Meanwhile, break of 1.0818 will suggest that such corrective rise is completed and turn outlook bearish.

Later this week investors will be taking a close look at the US Retail/Core Retail Sales and Consumer Sentiment.

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