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Coutts-EUR/USD sliding towards 1.35; USD Index may experience a pullback

July 4, 2014

ENP Newswire - 04 July 2014

Release date- 04072014 - Following the positive ADP private employment numbers in the US, the non-farm payrolls data smashed economists' predictions with an astonishing 288,000 new jobs created in June.

EUR/USD came under immediate selling pressure and broke all intra-day support levels, moving to the day's low of 1,3596. Even though the support at 1,3600/02 level was recovered, the daily close was only slightly above it which means, according to Karen Jones, technical analyst at Commerzbank that the 20-day moving average is being eroded 'to leave the focus on the much more important 1.3503 recent low and the 1.3482 2012 -2014 uptrend.' It is very likely that we see EUR/USD shedding the gains accumulated during the recent rally over the coming trading sessions.

On its way down to 1.35, however, EUR/USD will find support at 1.3580 and 1.3550.

Near-term rebounds can't be ruled out at those levels. Leaving the single currency aside for a moment, the US dollar also registered an impressive rise against most of its counterparts, including the Swiss franc and the Japanese yen.

Even so, as analysts at Capital Trust noted the US dollar index stalled right around an important resistance area.

'It managed to break the 80.00 resistance level and breached the trend line as well.

However, it found resistance in the form of a crucial confluence zone of 200 and 50-day simple moving averages.' Those analysts favor a pullback in the US Dollar Index in the near term that will impact on the behaviour of EUR/USD. NJ

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Source: ENP Newswire

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