EUR/USD remains sideways on the week and returns above 1.0200

• The dollar loses momentum late on Friday amid falling US yields.
• EUR/USD practically flat for the week remains sideways.
• The price continues to move below 1.0260 and is supported by 1.0100.

The EUR/USD hit a fresh daily low during the American session at 1.0145 and then rose back above 1.0200, amid lower US yields and rising stock prices on Wall Street.

Lower US yields keep dollar capped

Data released on Friday in the US showed a larger-than-expected rise in consumer spending and personal income. At the same time, core PCE showed that inflation is not receding. US yields rose initially, but then fell. At the end of the week, the 10-year Treasury bond yield stood at 2.63%, the lowest since April.

Falling yields weighed on the greenback, which lost momentum and fell, sending EUR/USD back above 1.0200. On Wall Street, equities were in positive territory, about to close the best month since 2020.

After a busy week in terms of economic data, the key event for next week is the official US employment report on Friday, in which the market consensus expects a payroll increase of 250,000. “Employment is likely to continue to advance strongly in July, but at a more moderate pace after four consecutive job gains to just under 400,000 in March-June. High-frequency data, including Homebase, continue to point to above-trend job creation,” said analysts at TD Securities.

Still trending down

Despite all the data and the FOMC meeting, EUR/USD is still trading sideways (as it has been doing since July 18), holding above 1.0100 and unable to clearly break above 1.0260.

“A break below 1.0105 will open the doors to a retest of parity, while below it new multi-decade lows could be expected, with the main downside target at 0.9880. The pair needs to accelerate through 1.0280 to shake off the negative stance and extend its rally towards 1.0360 and en route to 1.0440,” explains Valeria Bednarik, Chief Analyst at FXStreet.

Technical levels