- February 8, 2021
- Posted by: Analysis Team
- Category: FOREX, Technical Analysis
The price of crude declined slightly today after the latest rig count data by Baker Hughes and Enverous. The total number of oil and gas rigs rose by 8 last week, bringing the total to 392, which is 398 lower than in the same period last year. In total, the number of rigs has risen by 82 in the past 11 weeks helped by higher oil prices. Also, the US is producing about 10.2 million barrels of oil per day, according to the Energy Information Administration (EIA). Later this week, the EIA and API will publish the weekly inventory data.
The US dollar was little changed today as investors continued to react to the latest nonfarm payroll numbers. According to the Labor Department, the US added just 49,000 jobs in January while the unemployment rate dropped to 6.3%. The 49k increase was better than the previous month’s decrease of 140k. But it was lower than the expected increase of 50,000. The data also means that the American economy still has millions of people out of work, increasing the probability of another stimulus package by the government.
The economic calendar will be relatively muted today. In Asia, we will receive important Chinese trade data for the month of January. In Japan, the Ministry of Finance will publish the latest current account and bank lending data. In Switzerland, the statistics office will release the latest unemployment rate data. Analysts expect the data to show that the overall unemployment rate dropped from 3.5% to 3.4%. In Germany, the bureau will deliver the industrial production and the wholesale price index (WPI).
The EUR/USD pair dropped to a multi-month low of 1.1952 last week. It then rebounded to the important resistance at 1.2055 on Friday after the NFP data. On the four-hour chart, the price is slightly below the previous neckline of the head and shoulders pattern. It is also slightly below the descending trendline. Therefore, the outlook for the pair is relatively neutral at this point. There is a likelihood that it will continue rising and retest the resistance at 1.2109 or decline as bears target last week’s low of 1.1952.
The GBP/USD pair rebounded to a high of 1.3741 after the US nonfarm payroll data. On the four-hour chart, the price is a few points below the year-to-date high of 1.3758. It is also slightly above the 25-day and 15-day EMAs while the RSI is also rising. Therefore, the pair will likely continue rising as bulls target the high at 1.3758.
The USD/JPY pair rose to 105.76 last week. Technically, this was a continuation pattern after the price formed a bullish flag pattern. On Friday, the pair pulled back to a low of 105.3. It is still above the 25-day and 15-day moving averages and is forming a consolidation pattern. Therefore, the pair will likely resume the uptrend pattern this week.