Both the euro and pound are now down 0.3% against the dollar on the day. While EUR/USD is poised for a downside break, GBP/USD looks to be doing the same as it trades below 1.2600 currently:

The pair had been holding in between a range of 1.2600 to 1.2800 since mid-December. That represented a consolidation phase of sorts but finally, sellers appear to be trying to shake it off.

A firm daily close below 1.2600 will keep the downside pressure growing. And that will call into question a test of its 200-day moving average (blue line) next, seen at 1.2560 currently.

This article was written by Justin Low at www.forexlive.com.

Last Friday, the Dow Jones rallied into a new
all-time high following a surprisingly strong NFP report.
The headline number was much higher than even the most optimistic estimates
with the unemployment rate ticking lower. There were also some bad things
though like the plunge in Average Weekly Hours which contributed to push higher
Average Hourly Earnings and the Household survey showing job losses for the
second consecutive month.

In fact, even Fed’s Goolsbee
mentioned this detail saying that “despite the brisk hiring numbers, weakness
in overall hours worked suggests that this wasn’t as strong as that headline
number suggested. There are big seasonal adjustments in January and the data
might have been distorted a bit which makes trusting this report a little
harder.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones continues
to print all-time highs as the buyers pile in at every pullback. We can see
that we have a trendline that
will now define the uptrend. In case we get a pullback, we can expect the
buyers to lean on the trendline to position for new highs. The sellers, on the
other hand, will want to see the price breaking lower to position for a bigger
correction into the 37777 level first and upon a further break lower the 37066
level.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more
clearly how the price keeps on breaking the resistances,
retesting them and then continuing higher into new all-time highs. We can also
notice that in case we get another pullback, the buyers will also have the red
21 moving average around
the trendline for confluence.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action and we can notice that we have another resistance turned
support around the 38550 level where the buyers should lean
onto to position for another rally. The sellers, on the other hand, will want
to see the price breaking lower to position for a drop into the trendline and
upon a further break lower target the 37777 level.

Upcoming Events

This week is basically empty on the data front with just
a couple of key economic releases. Today we have the US ISM Services PMI where
the market will likely focus on the employment index given the big drop last
month. On Thursday, we will see the latest US Jobless Claims figures where the
market will want to see if the resilience in the labour market remains
intact.

This article was written by FL Contributors at www.forexlive.com.