EUR/USD testing the $1.3890 resistance

The EUR/USD is testing the $1.3900 mark on Friday, questioning the 2013 resistance. Market sentiment is EUR-positive following the yesterday’s neutral ECB (dovish actions were expected) and ahead of the US nonfarm payrolls release at 13:30 GMT.

Market consensus expects the US economy to have created 149K new jobs in February vs. 113K in January. Today’s NFP below the forecast could confirm the persisting weakness of the US labor market and to extend the USD weakness.  

However, we need to mention that euro has already become overbought. The pair is approaching the upper border of the February bullish channel (H4). Strong resistance for the EUR/USD lies at $1.4000. Even if weak NFP pushes the pair higher, we concede a correction towards $1.3820 or even lower early next week. 

Chart. H4 EUR/USD

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