The US stock market opened the year on the green territory as the major indices rose 1.7% during the week. The S&P 500 is approaching the resistance at 1300 points and NASDAQ is heading towards 2400 points. A break-up of these important resistances might help the indices to rise up to the 52-weeks highs.
The most important and encouraging event during last week was the Non-farm payroll change data that showed an increase of 200K jobs in the US economy, whereas the expectations were an increase of 152K new jobs. In addition, the unemployment rate was down by 0.2% to 8.5%. This surprising news regarding the American unemployment status launched the stock markets and supported the US dollar against most of the currencies.
EUR/USD
Unlike the US, the news from Europe is still bad. Hungary's rank was downgraded to junk due to the policy of its prime minister. Other countries are still struggling with their huge debts and the EUR keeps loosing points. All of these political crises are pulling the Euro down and the investors are running away from this currency, but the ECB press conference on Thursday will try to change that. The minimum bid rate is expected to remain unchanged.
On the technical aspect, the EUR broke down the support at 1.285, which we analyzed last week, and it is sliding downwards to 1.25. Pay attention to the stochastic oscillator, which indicates that the EUR is oversold and might correct-up any day.
GBP/USD
The 50 EMA has been following the pair for several weeks and it plays the role of a resistance. Each time the pair touched the 50 EMA it immediately turned over and started a bearish session. So did happen on Tuesday when the pair hit the resistance at 1.566 and slid down to the support of 1.54. The next support is at 1.53 and a break-down there might take the pound down to the psychological number 1.50.
The official bank rate will be published this Thursday, 45 minutes before the European bid rate is published. There are not any surprises expected regarding the interest level and therefore the MPC rate statement will be in the center.
USD/JPY
The pair reached the support at 76.5 and started correcting from this point, as we anticipated on the previous weekly analysis. Two signals suggest that the Yen might keep strengthening. First, the 20 EMA crossed below the 50 EMA, and second, Friday's candlestick ended-up red with a tail upwards. If the price slides under Friday's low, the pair will try to break-down the support at 76.5 again, and if it succeeds, it might fall to 75.5.
However, as we mentioned before, the USD is in a bullish momentum so it might try to climb to 78.0. In order to do that, it will have to break-through Friday's high at 78.3.0
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