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


  • EUR/USD regained traction on Thursday and climbed closer to one-month tops.
  • Mixed trade signals kept the USD bulls on the defensive and remained supportive.
  • The market focus now shifts to the closely watched US monthly jobs report (NFP).

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.

fxsoriginal

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD extends losses toward 1.1250 amid coronavirus concerns

EUR/USD is trading closer to 1.1250 as concerns about US coronavirus cases are growing. Eurozone finance ministers are meeting ahead of next week's summit.  US PPI and updated COVID-19 statistics are awaited.

EUR/USD News

GBP/USD pressured under 1.26 amid risk-off mood, Brexit uncertainty

GBP/USD is trading below 1.26, off the highs. Rising US coronavirus cases are pushing markets lower and the safe-haven dollar higher. Concerns about Brexit and the UK refusal to participate in the EU coronavirus vaccine scheme are weighing on sterling. 

GBP/USD News

Gold refreshes session tops, moves back above $1800 mark

The prevalent risk-off mood assisted gold to reverse an early dip to the $1796 region. A modest pickup in the USD demand might cap any further gains for the commodity. Investors also worried about the possibility of further escalation of Sino-US tensions.

Gold News

Canada Net Change in Employment June Preview: June is looking better and better

Job gains expected to more than double in June. Unemployment rate to drop to 12% from 13.7 in May. Ivey PMI was twice its forecast in June, highest since Nov 2019. USD/CAD would benefit from better June job figures.

Read more

WTI drops to fresh weekly lows below $39 amid virus risks, IEA forecast

WTI (August futures on Nymex) extends the steep declines seen on Thursday to drops over 1.50% in the European session this Friday. The oil bears breach the 39 level to hit the lowest levels in eight days at 38.76.

Oil News

Forex Majors

Cryptocurrencies

Signatures