EUR/USD, GBP/USD, and USD/JPY Analysis: Dollar Loses Gains Due to US Services Data

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The dollar initially rose on Friday but then retreated after data showed the US services sector fell sharply in December, erasing gains made after a report showed stronger-than-expected nonfarm payrolls last month. Earlier in the session, the dollar jumped after data showed the US economy added 216,000 new jobs in December, topping the consensus forecast of 170,000. The Institute for Supply Management (ISM) said its non-manufacturing index fell to 50.6 last month, the lowest since May, down from 52.7 in November. The service sector makes up more than two-thirds of the economy. Economists polled by Reuters had forecast the index would change little to 52.6.

EUR/USD

The EUR/USD pair is trading around the 1.0940 level. According to EUR/USD technical analysis, immediate resistance can be seen at 1.1000, a break higher could trigger a move towards 1.1045. On the downside, immediate support is seen at 1.0918, a break below could take the pair towards 1.0875. The eurozone reported lower-than-expected consumer price index data (2.9% vs. 3.0%).

Over the past week, a trading range has formed with boundaries of 1.0875 and 1.1000. Now the price is in the middle of the range and may continue to rise.

GBP/USD

The GBP/USD pair has declined today and is trading around 1.2690. On the GBP/USD chart, immediate resistance can be seen at 1.2770, a break higher could trigger a rise towards 1.2826. On the downside, immediate support is seen at 1.2673, a break below could take the pair towards 1.2610. There is no important economic data on the British currency; the pair is influenced by American news.

Over the past week, a trading range has formed with boundaries of 1.2610 and 1.2770. Now the price is in the middle of the range and may continue to rise.

USD/JPY

Against the backdrop of the stabilisation of the American dollar, the USD/JPY pair is correcting around the level of 144.30, despite positive Japanese macroeconomic statistics. On the USD/JPY chart, strong resistance can be seen at 145.95, a break higher could trigger a rise towards 146.56. On the downside, immediate support is seen at 143.73. A break below could take the pair towards 142.84.

Japan's services business activity index increased from 50.8 points to 51.5 points in December, in line with autumn parameters, and the household confidence index increased from 36.1 points to 37.2 points, the highest since December 2022. Tomorrow, the November household spending indicator will be published, which is expected to rise by 0.2% month-on-month, driving an annual correction from -2.5% to -2.3%, as well as the core consumer price indicator in Tokyo, reflecting the dynamics of inflation throughout the country: in December it may drop from 2.3% to 2.1%.

The price has broken through the lower boundary of the ascending channel and may continue to decline.

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