EUR/USD Forecast: Still unable to break above 1.1460

The EUR/USD pair eased from a fresh year high set at 1.1437 after an encouraging US employment report that anyway, was only enough to justify  some profit taking of the Yellen-triggered rally in the pair.

The Nonfarm Payroll report showed that the US added 215,000 new jobs in March, while the unemployment rate ticked slightly higher, up to 5.0%. Wages were a positive surprise coming in at 0.3% monthly basis against the 0.2% expected and taking the year-on-year change up to 2.3%. Market´s initial reaction was tepid, but as the US session develops the dollar is broadly higher across the board.  

Yellen said on Tuesday that the US central bank should proceed cautiously in raising rates, suggesting rates will remain lower for longer which resulted in a sharp dollar sell-off that persisted until the release of the NFP report, leaving the pair overstretched to the upside. The market however, has little reasons to buy back the greenback, as a rate hike is now out of the picture until September. 

View the Live chart of the EUR/USD


Anyway, the EUR/USD pair turned into the red for this Friday, and stands above the 1.1300 level  and the daily chart suggests the pair may correct further lower at the beginning of the upcoming week, as the technical indicators are turning south from near overbought levels, but at the same time, the price is far above its 100 and 200 SMAs, and the 20 SMA maintains a  sharp bullish slope around 1.1200, the level to break to consider the downward move will turn into a bearish continuation rally.  

In the weekly chart, is clear that selling interest has been appearing on approaches to the 1.1460/70 region ever since early 2015, and the tough level held once more. Still the price is quite close to it to consider the reversal is confirmed. The risk of a breakout beyond it due to dollar's weakness is still high. If the level is finally broken, the pair can extend its rally up to 1.1713, the high posted on August 2015.