Markets should have digested the potential ramifications of last week’s ugly payrolls number by now, yet the fact that a mere 74,000 jobs were added in December, coupled with a decline in the unemployment rate to 6.7%, presents something of a dilemma for the Federal Reserve in terms of its next move. This in turn is causing something of a headache for traders with an interest in the dollar crosses.
The euro had recovered from the 1.3550 lows in early trade, yet the move back off this support seems to be merely corrective rather than an overall trend reversal. The daily price action is still trading above the rising trend-line support from the lows of July 2013, with the 50-period moving average on the four-hour chart term also helping to support the single currency.
The pair is currently trapped in a range, with the 1.3688 level capping upside. Overall downside support comes from the 100-day moving average at those 1.3550 lows.