EUR/USD Forecast: Big miss on the headline NFP needed to confirm a bullish breakout

Following the previous session's intraday pullback from one-month tops, the EUR/USD pair regained some traction on Thursday amid some renewed and persistent selling bias surrounding the US dollar. Mixed trade signals, coupled with the recent disappointment from the US macro data kept exerting some pressure on the greenback. In the latest development, China reiterated its expectations that tariffs should be lifted as part of a phase-one deal.

Comments from China came on the back of a Bloomberg reported on Wednesday that both sides are moving closer to a trade deal before the December 15 tariffs deadline. The US President Donald Trump's conflicting signals further added to the confusion and contributed to investors’ nervousness. Trump on Wednesday said that talks with China were going very well, which was a complete turnaround from the previous session's statement that a trade deal with China may not come until after the 2020 US presidential election.

Nevertheless, the pair finally ended near the top end of its daily trading range and held steady above the 1.1100 handle through the Asian session on Friday. The market focus now shifts to the release of the closely watched US monthly jobs report, popularly known as NFP, scheduled for release later during the early North-American session. Given this week's dismal ADP report on private-sector employment, market participants might be prepared for weaker reading. However, a surprisingly stronger print might be enough to prompt some aggressive USD short-covering move.

Short-term technical outlook

From a technical perspective, the pair now seems to have found acceptance above the 1.1100 handle and hence, any subsequent buying has the potential to extend the momentum further towards the double-top resistance, near the 1.1170-80 region, en-route the 1.1200 handle.

On the flip side, support is pegged near mid-1.1000s and is closely followed by the 1.1025 horizontal level, which if broken will reinforce the bearish outlook. Below the mentioned support, the pair might turn vulnerable to slide back below the key 1.10 psychological mark and aim towards testing the next support near the 1.0955-50 region ahead of the 1.0900 handle.