EUR/USD Forecast: bears eyeing mid-1.1700s confluence support, NFP in focus

The US Dollar continued gaining some positive traction through the Asian session on Friday, dragging the EUR/USD pair farther below the 1.1800 handle to its lowest level since Nov. 22. Against the backdrop of upbeat ADP report on the US private sector employment, Thursday's release of weekly initial jobless claims data kept pushing the greenback higher. 

The pair remained under some selling pressure for the fifth consecutive session on Friday as investors looked forward to the keenly watched US monthly jobs data, popularly known as NFP, for fresh directional impetus. Heading into the key data risk, repositioning trade might infuse some volatility in absence of any major market moving releases from the Euro-zone.

From a technical perspective, the pair on Thursday confirmed a bearish break below a short-term descending trend-channel and is currently placed closer to an important confluence support near the 1.1755 region. The mentioned support comprises of 50-day SMA and 50% Fibonacci retracement level of 1.1554-1.1961 November upswing. Hence, a convincing break below the said support now seems to pave the way for an extension of the pair's near-term downward trajectory initially towards 61.8% Fibonacci retracement level support near the 1.1700 handle en-route 1.1665-60 horizontal support.

On the flip side, any recovery attempts back above the descending channel support break-point, around the 1.1775-80 region, might now confront fresh supply near the 1.1800 handle, also coinciding with 38.2% Fibonacci retracement level. Sustained move beyond the mentioned hurdle might trigger a short-covering bounce but seems more likely to be capped near mid-1.1800s.

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