Signal price

EUR/USD Price Breaks Key 0.9899 Level, All Eyes On ECB

  • The narrowing gap could signal a bigger bounce.
  • A new lower low activates a downward continuation.
  • The bias remains bearish despite temporary bounces.

EUR/USD price rose slightly on Monday as the dollar index pulled back some gains after an incredible rally.

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The pair rebounded after hitting the daily low of 0.9877. The pair is trading around 0.9941 at the time of writing. After a considerable drop, a temporary rebound is natural.

Non-farm payrolls boosted the USD on Friday. The indicator came in at 315K in August versus 295K expected but below 526K in July.

The greenback led the currency market even as the US unemployment rate was reported at 3.7%, above the 3.5% expected, while the average hourly wage rose 0.3%, less of 0.4% expected. Also, orders to factories fell by 1.0% even though specialists were counting on growth of 0.2%.

Today, Eurozone retail sales grew by 0.3%, in line with expectations. Germany’s Final Services PMI unexpectedly fell 48.2 points to 47.7 points, and Sentix investor confidence came in at -31.8 points, well below the -26.8 estimate .

On the other hand, the Eurozone final services PMI fell from 50.2 points to 49.8 points below 50.2, which should be a signal contraction. US banks will be closed on Labor Day. The RBA, BOC and ECB could shake up the markets this week.

EUR/USD Price Technical Analysis: Monday Open with Decreasing Spread

From a technical standpoint, the EUR/USD pair plunged after failing to reach a new high or stabilize above parity. It dropped below 0.9899 but failed to stay below that bearish hurdle.

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The price might try to close the gap. Failure to close it may signal intense downward pressure. After its strong sell-off, temporary growth was natural. Breaking back below 0.9899 and hitting a new low could activate more declines.

The weekly S1 (0.9880) is a hurdle on the downside. A new lower low could also bring short opportunities. Only holding above 0.9899 and narrowing the gap could trigger a meaningful recovery.

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