EUR/USD remains stuck near 1.0800 after US employment data
EUR/USD struggles to find direction and moves up and down in a narrow channel at around 1.0800 in the American session on Wednesday. The data from the US showed that employment in the private sector rose less than expected in November and helped the pair limit its losses.
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The Relative Strength Index (RSI) indicator on the 4-hour chart edged slightly higher after dropping to 70, suggesting that EUR/USD could stage a correction while keeping the bearish bias.
The 200-day Simple Moving Average (SMA) and the Fibonacci 38.2% retracement level of the latest uptrend form a strong resistance for EUR/USD at 1.0820. In case the pair rises above that level, 1.0850 (static level) could be seen as the next bullish target ahead of 1.0900 (Fibonacci 23.6% retracement, 100-period SMA).
On the downside, a daily close below 1.0800 (psychological level) could attract sellers and cause EUR/USD to push lower toward 1.0760 (Fibonacci 50% retracement, 200-period SMA on the 4-hour chart).
EUR/USD is struggling to make a decisive move in either direction on Wednesday and extending its sideways grind at around 1.0800.
The data from the US revealed that employment in the private sector rose by 103,000 in November. This reading came in below the market expectation of 130,000. Additionally, October's reading got revised lower to 106,000 from 103,000. Other data showed that Unit Labor Costs declined by 1.2% in the third quarter.
Although the initial reaction to these data caused the benchmark 10-year US Treasury bond yield to push lower, the US Dollar (USD) managed to hold its ground.
In the meantime, US stock index futures gained traction and were last seen gaining between 0.3% and 0.5%. A bullish opening in Wall Street could make it difficult for the USD to find demand and open the door for a rebound in EUR/USD.
There won't be any other high-tier data releases in the remainder of the day and the risk perception could impact the USD's valuation.
SPECIAL WEEKLY FORECAST
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The EUR/USD pair started the week on a strong footing but lost momentum and is set to close the week in the red, well below the 1.0900 mark. Market participants mainly traded on sentiment, betting against the US Dollar.