EUR/USD more likely to go up

Hi, dear traders!

The first trading week of 2022 finished with the release of US labor market data. The reports were mixed - non-farm payrolls indicated that only 199,000 new jobs were created in December - far below 400,000 vacancies forecasted earlier. The previous payroll report was revised upwards from 210,000 to 249,000 new jobs, though it did not alleviate the disappointing December data. However, unemployment fell to 3.9%, compared to the expected rate of 4.1%. Average hourly earnings gained 0.6%. Economists forecasted hourly earnings to increase by only 0.4%. The market had to digest rather mixed reports from the US.

Weekly

According to the weekly chart, a candlestick similar to the hammer reversal pattern emerged after January 3-7. Although it did not appear at the very end of the downward movement, its very long lower shadow and closing price above 1.1300 and 1.1360 indicate a bullish scenario could be possible. Such a scenario would be confirmed if this week's trading closes above the red Tenkan-Sen line of the Ichimoku cloud and the key level of 1.1400. Bearish traders would have to break through the support at 1.1187 and close below it to send EUR/USD into a downtrend. Last week's closing price of 1.1361 makes it a difficult goal to achieve, and the pair is more likely to go up than down.

Daily

Last Friday, the market went up after the mixed US labor market data was released. This is not surprising, because unemployment and average hourly earnings are no less important for market players than non-farm payrolls. EUR/USD seems unlikely to drop below 1.1300, and a continuing uptrend could be possible. If the pair settles within the Ichimoku cloud on the daily chart, its upside movement would be extended. On Friday, EUR/USD rose strongly, surpassing the red Tenkan-Sen line and the 50-day SMA line. If the pair continues to go up, it would face resistance at the key level of 1.1385, which it failed to break throw twice earlier. EUR/USD's further trajectory would be determined by whether it manages to break through this resistance or not. Traders are recommended to open long positions after small downward corrections and consider opening short positions near 1.1350.

Good luck!