The euro / dollar rate fell below 1.1990 after US Treasury Secretary Yellen announced a rate hike. On Wednesday, two critical US data will shake the pair. Yohai Im, an analyst at FXstreet, outlines the key levels to watch out for before the data is released.
Look: EUR / USD will resume falling to 1.15-1.16 soon – Nordea
1.1990 – critical range separator
“Treasury Secretary Janet Yellen’s speech on the increased demand has affected the markets and raised the dollar. Going back to these comments doesn’t seem to help. While Yellen had occasional oversights in her previous role, some consider her words to be the first trial balloon before a more serious move by the bank. ”
“The ADP jobs data for April should show growth in private sector employment. A level close to one million positions received will boost expectations for Friday’s official nonfarm payrolls data. It is important to remember, however, that the correlation between the two statistics was uneven. ”
“The second issue is the ISM purchasing managers’ index, which should remain above 60 points, which indicates a steady growth. Updated estimates may be lower after disappointing manufacturing PMI released earlier this week. The employment component will be closely monitored. “
“Violation 1.1990 has not yet been confirmed, but it is significant. The EUR / USD rate broke above this level in mid-April and stayed higher, making it a clear range separator. However, now it is starting to crumble, which is a bearish sign.
“Below 1.1990, the next lines to consider are 1.1945 and 1.1925, referring to the beginning of spring.”
“Some resistance is at the level of 1.2015, which kept the euro / dollar from falling. It is followed by 1.2055, which provided support at the end of last month. “