… Euro going up deaf, mute and blindfolded
Although the recent contraction of the U.S. economy during the fourth quarter added to the upside, we can perfectly argue that the dockets in both Euroland and the U.S. have not greatly influenced in the recent burst of price action. Every trader knows that in a bull market, no matter how bad news, results or events might be, the underlying asset would tend to ignore them as it is fixated in one thing only: higher ground. That is why yesterday's contraction of the Spanish GDP and today's horrible figures out of the German retail sales were dust in the wind. In addition, the same happened after the FOMC minutes, although in this case the markets priced in pretty much the whole statement.
January's Non-farm Payrolls is almost among us. Prior surveys expect the U.S. economy to add 160K jobs, a tad higher than December's 155K. Therefore, if forecasts are fulfilled, there is the likeliness that more of the same would lie ahead for the markets, while surprising figures - like jaw-dropping figures - may boost the greenback and inject a sedative to this euro upside.
The analyst Karen Jones at Commerzbank argued the cross "has reached the 55 MONTH moving average at 1.3564. The Elliot wave count on the monthly chart is also here at 1.3572 and the top of the daily channel is 1.3580. This is a tough band of resistance - we remain nervous of failure here but acknowledge that a fall below 1.3410/00 minimum is required to alleviate immediate upside pressure".
Adding to the technical view, breadth figures, such as the Bullish Percentage Index, developed by the research team at FXstreet.com, is confirming the euro momentum, showing at the moment that 84.21% of euro-based pairs are still on bullish mode, according to point and figure patterns.