EUR/USD Investing Steadies After US Jobs Data

The EUR/USD pair showcased stability during Monday’s Asian trading session, remaining within a tight trading range. This consolidation followed significant gains the pair achieved last week, reaching its highest level since September 14 on Friday. Despite the consolidation, EUR/USD investing stayed below the mid-1.0700s, influenced by a mild resurgence of the US Dollar (USD).

US Dollar Recovers After Last Week’s Decline

The USD Index (DXY) gauges the Dollar’s performance against a basket of currencies. Besides, it showed a partial rebound after a sharp decline last week. This decline had taken the index to its lowest level in six and a half weeks. The slide in DXY followed the release of softer-than-expected US employment figures, where the closely watched Non-Farm Payroll (NFP) report indicated that the US added only 150K jobs in October. This number fell below the expected 180K and also revised the prior month’s data downward from 336K to 297K.

Fed Rate Hike Expectations: Is Now The Best Time To Trade EUR/USD?

The softer US employment data has further cemented expectations that the Federal Reserve (Fed) may keep its current interest rate stance in the upcoming December meeting. This contributed to a decline in US Treasury bond yields. Furthermore, the existing market sentiment favouring risk-on activities diminished the attractiveness of the US Dollar as a safe-haven asset.

Technical Analysis and Projected Trading Range

The EUR/USD pair is currently displaying increased bullish momentum, approaching the anticipated target of 1.0760 within a supportive bullish channel. This path increases the chances of going beyond this point, potentially opening the door for additional positive correction in the upcoming sessions, with attention on the 1.0860 area as the next notable target.

While the short-term outlook is positive, traders should be cautious. Failure to break above the 1.0760 level might trigger a bearish reversal, prompting a retest of the crucial 1.0640 support level before the pair’s next direction becomes clear.

Today’s expected trading range lies between the support at 1.0660 and resistance at 1.0810 levels.

Analysts Weigh in on the Outlook for EUR/USD

Analysts suggest that the fundamental backdrop leans in favour of a declining US Dollar, potentially paving the way for an upward trend in the EUR to USD pair. Now, market participants are redirecting their focus toward the ultimate Eurozone Services PMI information. This data could impact USD pricing trends and create short-term trading possibilities for EUR/USD.

Factors Contributing to the Bullish Momentum

The recent rally in EUR/USD stems from the expectation that the Federal Reserve will no longer raise interest rates in this cycle. This shift, coupled with robust German factory orders and Eurozone economic data, strengthens the case for EUR/USD’s upward momentum.

Support and Resistance Levels to Watch

Key support and resistance levels traders should monitor include $1.07838 and $1.08 on the upside, while downside pressure may emerge around $1.0695 and the 55-day Simple Moving Average (SMA) at $1.0654.

The outlook for EUR/USD investing remains optimistic, supported by economic data and changes in the Fed’s interest rate stance. As traders analyze key support and resistance levels, market dynamics are expected to shape the pair’s future trajectory.

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