At the beginning of the week, the US dollar managed to reach new highs against certain currencies. For instance, the EUR/USD pair hit a recent low of 1.0200, sellers of GBP/USD tested the support at 1.2100, and the USD/JPY pair is stubbornly trying to stay above 158.00.

EUR/USD

The US employment report released last Friday provided significant support to the US dollar. The increase in new jobs at 256K, against a forecast of 164K, and the drop in the unemployment rate to 4.1%, versus the expected 4.2%, suggest that a change in the Federal Reserve's monetary policy may be anticipated in the near future.

The upcoming inauguration of President Donald Trump and the associated threats of new trade wars are putting additional pressure on EUR/USD.

On Tuesday, sellers of the EUR/USD pair managed to break the current year’s low at 1.0220. The price quickly bounced back, forming a reversal pattern, a "hammer." Technical analysis of EUR/USD indicates a potential continuation of the upward correction if buyers manage to hold above 1.0340. However, if the price drops below 1.0230, the recent low could be revisited.

Factors that may influence EUR/USD pricing include:

• Today at 10:45 (GMT+2): Harmonised Consumer Price Index (CPI) of France
• Today at 11:00 (GMT+2): Speech by European Central Bank Vice-President Luis de Guindos
• Today at 18:00 (GMT+2): US Core Consumer Price Index (CPI)

GBP/USD

The British currency has also been under downward pressure in recent weeks. After bouncing off 1.2570, the pair lost over 400 points and tested significant support at 1.2100.

Technical analysis of GBP/USD suggests a potential correction towards 1.2370-1.2300, if buyers can hold above 1.2250.

In addition to US inflation data, the following events could influence GBP/USD movement:

• Today at 10:00 (GMT+2): Consumer Price Index (CPI) for the UK
• Today at 12:30 (GMT+2): UK House Price Index
• Today at 13:00 (GMT+2): UK 10-year Government Bond Auction

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.