EUR/USD slipped on Friday after U.S. Fed Chair Janet Yellen commented on the health of the Labor department of the Nation, the currency pair narrowed down by 0.29% to consolidate at 1.3240.
Janet Yellen said the U.S. economy is recovering at a decent pace and the Labor department is strengthening at a much faster rate than expected. More Jobs have been added than were lost during the post recession period, according to the figures released by the labor department, the payroll numbers have exceeded the figures of January 2008 and Payroll addition have peaked 230,000 a month from previous average addition of 190,000 a month in the preceding two years.
The Labor market has shown strong improvement in the last couple of quarters, with the industrial activity already strengthening the U.S. economy was lagging because of the Labor market, with recovery of the Labor market the Economic recovery of the U.S. now looks very strong, resulting in strong demand for the U.S. dollar against the Single currency.
The Currency pair has been on a strong downward bias since last couple of weeks, the Euro has been witnessing strong sell off amid growing concerns in the Eurozone, as the daily charts suggest, the currency pair clearly looks oversold, the relative strength index is below the 30 mark and is trending downwards, the stochastic oscillator also suggests the currency pair is highly oversold but not showing any signs of a reversal from the current levels.
From the current levels the currency pair has strong resistance around $1.3362 levels and on the downside the currency pair is expected to find support around $1.3180 levels.
Short the currency pair with immediate target of $1.3175 and stop loss of $1.3310
Traders can go long on the currency pair with a short term target of $1.3350 and strict stop loss of $1.3175.