Categories: Markets

EUR/USD tops 1.1000 after NFP report, Euro ends week on a bullish tone

EUR/USD tops 1.1000 after NFP report, Euro ends week on a bullish tone
  • Following weak US data, EUR/USD hits a fresh weekly high above 1.1004.
  • The US non-farm payrolls report for July gave mixed signals, with fewer people joining the labor force while wages rise.
  • Germany reported strong factory orders in June, but EU retail sales came in at -0.3%m/m, dampening rate hike expectations.

EUR/USD rallied strongly above 1.1000 on Friday, reversing its earlier losses of 0.80%, and poised to end the week on a bullish tone and poised to break above key technical indicators. Factors such as US dollar weakness, buoyed by bleak economic data, pushed EUR/USD to fresh weekly highs at 1.1041. At the time of writing, EUR/USD is trading at 1.1024, up 0.69%.

Disappointing US Non-Farm Payrolls have fueled a strong EUR/USD recovery

The US Department of Labor released employment data in the form of non-farm payrolls for July, which showed the economy added just 187,000 people to the workforce, below estimates of 200,000. people. In addition, the unemployment rate reached 3.6%, above 3.5%. Although the data shows that the labor market is easing, it is showing signs of resilience. It remains one of the main reasons keeping inflation around 3%, making it difficult for the US Federal Reserve (Fed). However, it is too early to claim victory as wages rose, with average hourly earnings rising to 4.4% yoy, beating estimates of 4.2%.

The EUR/USD pair strengthened on the report as the market punished the dollar and US Treasury yields plunged. The Dollar Index, which measures the value of the dollar against a basket of currencies, fell 0.70% to trade at 101,766.

In the Eurozone (EU), Germany posted strong factory orders in June, but these were offset by weak retail sales across the bloc. June retail sales came in at -0.3%m/m, below estimates of 0.2%, and below May’s upward revision of 0.6%. Following these data, the odds of the European Central Bank (ECB) raising interest rates are moderate, with a 35% chance of a 25 basis point hike in September. But the estimates for October and November remain high, at 60% and 70%, suggesting that the ECB could follow the Fed’s path of skipping policy meetings.

Ultimately, Central Banks, the Fed and the ECB are data dependent, but the strength of the US economy could send EUR/USD down, despite the recent downgrade of the US credit rating. of Fitch. Next week’s inflation releases in the US and Germany could give some clues about the real price situation. Weak readings could prevent both institutions from raising rates at their September meetings.

EUR/USD Price Analysis: Technical Perspective

EUR/USD is biased between neutral and bearish, despite reversing most of its losses and recapturing the 20-day EMA at 1.1021. To change their bias to neutral, EUR/USD buyers must recapture the April 26 low resistance at 1.1095, followed by 1.1100. Breaking above will expose the July 27 daily high at 1.1149, followed by the 2021 daily low at 1.1186 and 1.1200. On the flip side, key support levels for EUR/USD would be 1.1000, followed by the 50-day EMA at 1.0973. A break below would expose the Aug 3 low at 1.0912.

EUR/USD

Overview
Last price today 1.1019
Today Change Daily 0.0070
today’s daily variation 0.64
today’s daily opening 1.0949
Trends
daily SMA20 1.1077
daily SMA50 1.0931
daily SMA100 1.0917
daily SMA200 1.0739
levels
previous daily high 1.0963
previous daily low 1.0912
Previous Weekly High 1,115
previous weekly low 1.0944
Previous Monthly High 1.1276
Previous monthly minimum 1.0834
Fibonacci daily 38.2 1.0944
Fibonacci 61.8% daily 1.0932
Daily Pivot Point S1 1,092
Daily Pivot Point S2 1.0891
Daily Pivot Point S3 1.0869
Daily Pivot Point R1 1,097
Daily Pivot Point R2 1.0992
Daily Pivot Point R3 1.1021

Source: Fx Street