EUR/USD extends slide toward 1.1750 as the US dollar remains strong post NFP
|- US dollar prints fresh highs near the end of the week as US yields soar.
- EUR/USD heads for the lowest daily close in four months.
The EUR/USD dropped further and bottomed at 1.1754, the lowest level in two weeks. The pair is testing the 1.1750/55 area, a key support that capped the downside several times in July.
The slide is being driven by a rally of the US dollar across the board. The DXY is up by 0.60% having the best day in weeks and trading at two-week highs. At the same time, stocks are holding in positive ground in Wall Street.
The bond market is having an interesting day as US yields soar supporting the greenback. The 10-year stands at 1.29%, the highest in a week, up more than 5% on Friday.
The numbers from the US employment report came in better-than-expected triggering sharp moves. The economy added 943K jobs in July and the unemployment rate dropped to 5.4%. Analysts at Well Fargo point out recent data will increase the debate over when the labor market will meet Fed’s “substantial further progress.” “Fed officials will likely be pleased with July's progress, but we ultimately think they will want to see further ground recovered and if constraints boil down to short-term frictions or longer-lasting damage before kicking off tapering.”
On a weekly basis, EUR/USD could post the lowest close since November. Currently is testing the 1.1750/55 support area and a break lower would add more negative pressure.
Technical levels
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