By fxtimes.com

EURUSD Technical Bias: Bearish

Highlights:

• US dollar index reaches 97.50, a more than 11 ½ year high.
• EURUSD falls to 1.0885, a fresh 12-year low.
• US nonfarm payrolls increase by 295,000 in February, unemployment falls to 5.6%.

The US dollar climbed to a more than 11-and-a-half year high against a basket of currencies Friday, as the euro plummeted to new lows after European Central Bank President Mario Draghi announced a start date for bond purchases.

The US dollar index, a weighted average of the dollar against a basket of competitor currencies, rose 1.2 percent to 97.50.

The euro fell fresh multiyear lows on Friday. The EURUSD plummeted around 170 pips to 1.0858, a fresh 12-year low. The pair faces immediate support at 1.0835. On the upside, initial resistance is likely found at 1.0920.

The dollar benefited from another solid nonfarm payrolls report on Friday showing the US labour market was heading toward full employment, despite tepid wage growth. Employers added 295,000 nonfarm jobs in February, pushing the three-month average to 288,000. The unemployment rate dipped to 5.5 percent, a fresh six-and-a-half year low.

The euro, meanwhile, was still under pressure after the ECB said that Monday would be the start date for purchasing €60 billion worth of private and public bonds. The Bank’s long-awaited quantitative easing program was announced in January and is expected to reach €1 trillion by September of next year.

The common currency failed to generate support even after the ECB upgraded its growth outlook. The Bank now expects the Eurozone economy to grow 1.5 percent in 2015, up significantly from prior estimates of 1 percent. However, inflation is expected to run at zero in 2015 before rebounding next year.

Eurostat confirmed on Friday that the Eurozone economy expanded 0.9 percent annually in the fourth quarter, buoyed by higher investment and exports. Compared to the third quarter, Eurozone GDP expanded 0.3 percent.

Article by fxtimes.com