Euro Trend Faces an Early Test Today

January 5, 2018 8:58AM CST

Dollar: On the plus side, the dollar has managed to respect consolidation low support this week, but the bear camp has to be cheered by the fact that mostly positive jobs data yesterday failed to result in a positive close.  In fact, the dollar finished yesterday within ticks of a fresh downside breakout and it could take above average US data today to avoid a downside breakout and the lowest dollar print since late September.  On the other hand, one should not rule out the potential for a temporary rise above 92.00 before the temporary dollar bullishness subsides.

dollar_mar18_daily_chart

Euro:  While the headlines are trumpeting the prospect of the ECB getting closer to removing some stimulus, the euro is obviously undermined slightly as a result of an avalanche of euro zone inflation and confidence readings.  However, a tow point uptick in French consumer confidence, combined with an above expectation euro zone producer price reading does give the currency some fundamental underpin.  However, the euro is certainly poised to see expanded volatility in the wake of the US data window and that could make uptrend channel support at 1.2045 and consolidation low support at 1.1988 key pivot points.  In the end, a temporary setback in the euro would appear to be a buying opportunity for aggressive traders.

euro_mar18_daily_chart

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