EUR/USD prepares to cross 1.0000 amid weaker DXY, US NFP eyed
|- EUR/USD is aiming to cross the parity amid lower consensus for US employment data.
- ECB Lagarde has failed to provide a true picture of the inflation situation.
- Retail Sales data in the trading bloc is expected to decline by 1.7% against a decline of 0.9% recorded earlier.
The EUR/USD pair is hovering around the psychological resistance of 1.0000 after a perpendicular rally post a break above the 0.9732-0.9850 consolidation. The major is preparing to demolish the parity as the US dollar index (DXY) is witnessing an intense sell-off by market participants. The DXY is expected to display a sheer downside move after surrendering the crucial support of 110.00.
The DXY’s appeal has been weakened ahead of the US employment data. Federal Reserve (Fed)’s extremely hawkish campaign to achieve price stability has resulted in weaker projections for the US Nonfarm Payrolls (NFP) data. The corporate has postponed the capacity expansion plans and fresh investment opportunities to dodge higher interest obligations. This has slowed down the recruitment process and henceforth the job opportunities.
As per the estimates, the US economy added a fresh 250k jobs in the labor market in September, which is extremely lower than the prior release of 315k. A lower-than-expected reading would weaken the DXY further as the Fed will be compelled to trim its hawkish tone to safeguard the economy from a recession situation.
On the Eurozone front, the comments from European Central Bank (ECB) Christine Lagarde on Tuesday cleared that the inflation rate is still in unchartered territory. ECB Lagarde cited that it was difficult to say whether or not inflation has peaked in the euro area, as reported by Reuters. She further added that "The minimum that we have to do is to stop stimulating demand,"
Going forward, the Eurozone Retail Sales data will be of utmost importance. The economic data is seen lower at -1.7% vs. the prior release of -0.9% on an annual basis. In times, when price pressures are soaring, a decline in retail sales will weaken the shared currency bulls.
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