- January labor market figures beat expectations.
- The dollar strengthened in the market and accelerated the increases.
- EUR/USD reversed trend, erased gains and fell to 1.1420.
The EUR/USD erased daily gains and retreated from highs in months after the release of the US employment report, which showed figures above expectations. The pair fell from the 1.1470 area to 1.1420, marking a new low for the day.
The volatility in the market remains high after the US employment figures that triggered sharp movements. Nonfarm payrolls increased by 467,000 in January, beating expectations of 150,000. The unemployment rate rose 4%, against the expected reading of 3.9%, but it came along with an increase in the labor participation rate.
The report and its details were better than expected, which boosted the dollar and Treasury bond yields. Lto 10-year rate jumped to 1.89%, and is about to mark highs in years. Metals reversed the trend and fell significantly.
With the recent reversal of the intraday trend, EUR/USD turned negative for the day, snapping a five-day gain streak in a row. Hours ago the pair had reached 1.1483, the highest level since mid-November.
The pullback also comes after the EUR/USD was unable to firmly break above the 1.1480 area. Should the decline extend, supports can be seen at 1.1400 and then at 1.1370. A return below 1.1370 would call into question the ongoing bounce in EUR/USD.
Technical levels
Source: Fx Street
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