US dollar holds steady after weak US nonfarm payroll numbers

The British pound held steady today as the market continued to reflect on the Bank of England (BOE) interest rate decision made yesterday. The bank left interest rates and quantitative easing unchanged. It also downgraded its outlook for the UK economy. Today, data by Halifax said that the house price index declined by 0.3% in January after rising by 0.2% in December. The prices rose by 5.4% on an annualised basis, lower than the previous 6.0%. The decline was mostly because of the ongoing lockdown in the country.

The US dollar rose after the second nonfarm payroll numbers of the year. According to the Bureau of Labour Statistics (BLS), the US added more than 49,000 jobs in January. This was an improvement from the previous month’s 140k job losses. The unemployment rate fell to 6.3% while wage growth rose by 5.5%. The US economy continues to face a tough period because of the virus. More than 10 million people remain out of work and yesterday, data showed that the initial jobless claims rose by more than 719k. 

Global stocks rallied today as traders continued to wait for more stimulus in the United States. Senate members are still debating the recent $1.9 trillion proposals by Joe Biden. Economists believe that the potential stimulus will be less than that. Stocks are also rising after the relatively strong corporate earnings from the United States and Europe. Companies like BNP Paribas, Snap, and Pinterest reported relatively strong earnings. In total, the Dow Jones and S&P 500 futures have risen by more than 0.40%.

EUR/USD

The EUR/USD pared back some of the previous losses. It is trading at 1.1975, which is slightly above the intraday low of 1.1950. The price is below the Ichimoku cloud and the short-term moving averages. Also, the Relative Strength Index (RSI) has moved from the oversold level of 25 to 32. Therefore, the pair will remain in a downward trend so long as it is below the 25-day EMA.

GBP/USD

The GBP/USD pair rose today as traders continued to reflect on the BOE decision. On the hourly chart, the pair has formed a bullish flag pattern that is shown in white. It has also moved above the 25-day and 15-day moving averages while the MACD is above the neutral level. Therefore, the pair will likely break-out higher in the near term.

EUR/GBP

The EUR/GBP price dropped to the lowest level since May last year. On the daily chart, the price has moved to the 61.8% Fibonacci retracement level and below the 25-day and 15-day moving averages. It also moved below the white descending wedge pattern. Therefore, the pair will likely continue falling as bears target the next support at 0.8650.