- The dollar loses strength after the rally on Friday after the employment data.
- Calm start to the week in terms of data.
- EUR/USD remains sideways, with a downward trend.
EUR/USD is trading around 1.0185 on Monday with modest gains. Hours ago the pair climbed to 1.0214 but then pulled back finding support at 1.0170. The dollar is somewhat weakened at the beginning of the week giving support to the pair.
Lower the foam of the NFP
The dollar on Friday appreciated after US jobs data beat expectations and raised the stakes for a Federal Reserve more aggressive. On Monday the strength of the dollar moderated. At the same time, Treasuries are recovering, although yields are still well above their pre-NFP level. The economic calendar is light on Monday. Only on Wednesday will there be data on the impact of US inflation.
What happens in the bond market could be key for the dollar in the coming hours. If there is a further rise in bond yields, DXY could be boosted dragging EUR/USD lower.
Another factor that is giving support to the pair is the optimism in the markets. Wall Street futures are trading higher.
Should the bounce extend, immediate resistance is located at 1.0220, followed by 1.0255. Above is the 1.0280/1.0300 zone, which is where the current range barrier is. A confirmation above will leave the euro positioned for more gains.
In the opposite direction, at 1.0145 there is initial support, followed after by 1.0100. A close well below that level would leave EUR/USD primed for further declines.with a possible parity test.
Technical levels
Source: Fx Street
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