EUR/USD Forecast: Euro could extend recovery on a weak NFP print
- EUR/USD went into a consolidation phase below 1.0800 after posting gains on Thursday.
- Nonfarm Payrolls in the US are forecast to rise by 180K in November.
- A disappointing jobs report could weigh on the USD ahead of the weekend.
EUR/USD benefited from broad-based US Dollar (USD) weakness on Thursday and registered daily gains for the first time since November 28. Early Friday, the pair holds steady slightly below 1.0800 as market participants refrain from taking large positions ahead of the US November jobs report.
The positive shift seen in risk mood made it difficult for the USD to find demand in the second half of the day on Thursday and allowed EUR/USD to inch higher.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.99% | 1.05% | 0.68% | 1.11% | -1.55% | 0.92% | 0.89% | |
| EUR | -1.02% | 0.07% | -0.31% | 0.12% | -2.60% | -0.06% | -0.10% | |
| GBP | -1.09% | -0.06% | -0.38% | 0.05% | -2.63% | -0.14% | -0.16% | |
| CAD | -0.69% | 0.31% | 0.38% | 0.44% | -2.26% | 0.25% | 0.22% | |
| AUD | -1.12% | -0.12% | -0.05% | -0.44% | -2.73% | -0.19% | -0.22% | |
| JPY | 1.50% | 2.53% | 2.74% | 2.23% | 2.68% | 2.45% | 2.42% | |
| NZD | -0.92% | 0.07% | 0.13% | -0.24% | 0.19% | -2.50% | -0.03% | |
| CHF | -0.92% | 0.10% | 0.16% | -0.21% | 0.22% | -2.48% | 0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Nonfarm Payrolls (NFP) in the US are forecast to rise by 180,000 in November. A reading above 200,000 could force investors to reassess the possible timing of the Federal Reserve (Fed) policy shift and provide a boost to the USD with the initial reaction. On the other hand, a disappointing print below 150,000 could make it difficult for the USD to stay resilient against its rivals ahead of the weekend.
Meanwhile, annual wage inflation is expected to edge lower to 4% from 4.1% in October and the Unemployment Rate is seen staying unchanged at 3.9%.
The US economic docket will also feature the University of Michigan's preliminary Consumer Sentiment Survey for December. Nevertheless, investors are likely to ignore this report while assessing the details of the labor market data.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart edged higher but remained below 50, pointing to a lack of recovery momentum in EUR/USD. The pair needs to make a decisive move above 1.0820 (200-day Simple Moving Average (SMA), Fibonacci 38.2% retracement of the latest uptrend) and start using that level as support to extend its recovery toward 1.0860 (static level, 50-period SMA on the 4-hour chart) and 1.0900 (Fibonacci 23.6% retracement, 100-period SMA).
On the downside, 1.0760 (Fibonacci 50% retracement, 200-period SMA) aligns as important support before 1.0700 (psychological level, Fibonacci 61.8% retracement).
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
