Baxia Markets
January 03, 2024

EURUSD Trends Downward as Technical Analysis and Economic Data Converge

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In the realm of forex, EURUSD is gearing up for a significant day with key economic indicators on the horizon, poised to influence the market sentiment. One of the pivotal releases on Wednesday is the Job Openings and Labor Turnover Survey (JOLTS) by the US Bureau of Labor Statistics (BLS). Market participants and Federal Reserve (Fed) policymakers are closely eyeing this report, which delves into the change in job openings, layoffs, and quits for November.


JOLTS data is highly anticipated as it unveils crucial insights into the intricate dynamics of the labor market. This information carries substantial weight in understanding supply-demand dynamics, playing a pivotal role in influencing salary trends and contributing to the broader economic narrative. Despite a downward trend in job openings throughout 2023, a signal of tempered demand for labor, the numbers still remain significantly above pre-pandemic levels.


Today, economists are eyeing the JOLTS data, expecting an increase in job openings at 8.850M compared to the previous figure of 8.733M. Additionally, the ISM Manufacturing PMI is projected to rise to 47.1 from the previous 46.7, while the ISM Manufacturing Prices are expected to cool down to 47.5 from the previous 49.9. These mixed forecasts introduce an element of uncertainty into the market, adding to the complexity of the current economic landscape.EURUSD Trends Downward as Technical Analysis and Economic Data Converge

A glance at the 1-hour timeframe chart reveals a significant development – the emergence of a death cross between the EMA 50 and EMA 200. This signals a substantial trend change from bullish to bearish, amplifying the importance of cautious trading strategies.


The volume profile indicator, highlighting the value area with pink lines, indicates a critical juncture as prices teeter on the brink of breaking through the lower side of the value area at 1.0930. This breakthrough would further validate the bearish trend, instilling confidence in a downward trajectory.


The MACD indicator aligns with this bearish sentiment as both the histogram and signal line languish below the 0 line. This synchronous movement reinforces the prevailing bearish momentum in the EURUSD market.

Finally, the RSI indicator has breached the 40% level, a trend observed since December 28, 2023, nearing the pinnacle of the previous bullish rally. This downturn in RSI adds another layer of confirmation to the emerging bearish trend.


In conclusion, EURUSD currently faces a major bearish trend as it navigates through crucial economic data releases. The mixed forecasts for today's key economic indicators introduce an element of uncertainty, offering a potential breather for the bearish pressure. However, a scenario where all outcomes meet or fall below forecasts could prompt a further descent for EURUSD. Traders are advised to stay vigilant, adapting strategies in response to the evolving economic landscape.


Key Economic Releases to Watch Today

USD, ISM Manufacturing PMI (Dec) 
Forecast 47.1 vs Previous 46.7

USD, ISM Manufacturing Prices (Dec) 
Forecast 47.5 vs Previous 49.9

USD, ISM Manufacturing Prices (Dec) 
Forecast 8.850M vs Previous 8.733M

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