EUR/USD breaks above 1.0600 level after mixed US data, ahead of Fed Minutes

• The November JOLT report beat estimates and upward revisions to the October report suggest the labor market remains tight.
• The US ISM manufacturing PMI for December contracted for the second month in a row.
• EUR/USD Price Analysis: Around the 20-day EMA and the 1.0600 signal.

The euro (EUR) eases against the US dollar (USD) after hitting daily highs at 1.0635 and falls after the release of mixed US economic data, which lifted the dollar slightly and soured sentiment. At time of writing, EUR/USD is trading at 1.0616, up 0.66%.

The EUR/USD pair fell below 1.0600 following the release of US economic data. The November JOLTs report showed the labor market remains tight, standing at 10.458M vs. 10.0M estimates, while October’s upward revision to 10.512M vs. 10.334M cemented the Federal Reserve’s (Fed) arguments. in favor of a 50 basis point rate hike on February 1.

At the same time, the Institute for Supply Management (ISM) released December’s PMI Manufacturing index, which fell to 48.4, above the 48.5 estimated by street analysts. Timothy R. Fiore, Chairman of the ISM, noted: “The US manufacturing sector contracted again, with the manufacturing PMI® hitting its lowest level since the recovery from the coronavirus pandemic began. Panelists on the Committee on Business surveys report that new order rates have softened over the past seven months, so the December Composite Index reading reflects the slowdown in company output.”

Going deeper into the subcomponents of the report, the Employment index rose to 51.4, returning to expansion, showing an improvement in the labor market, although putting pressure on the Federal Reserve to take new measures. The Production and Price indices continued to ease, reflecting consumer preference for services over goods.

Meanwhile, the Dollar Index (DXY), a gauge of the dollar’s value against a basket of six currencies, fell 0.41% to 104,258.

EUR/USD Price Analysis: Technical Perspective

On a daily chart view, the EUR/USD pair is biased neutral and oscillates around the 20-day EMA at 1.0583. The EUR/USD pair remains exposed to selling pressure as it failed to break Tuesday’s high at 1.0683. However, it must be said that the Relative Strength Index (RSI) bounced near the mid-50 line, while the Rate of Change (RoC) is almost flat.

Key EUR/USD resistance levels are 1.0683, followed by the 1.0700 signal. On the other hand, the first support for EUR/USD would be the signal at 1.0600, followed by the 20-day EMA at 1.0584 and the January 3 low at 1.0519.