EUR/USD rebounds from multi-week lows, trades above 1.0750
EUR/USD came under heavy bearish pressure and declined to its weakest level in three weeks below 1.0750 on Friday after the stronger-than-expected Nonfarm Payrolls data. Week-end flows, however, helped the pair erase its daily losses.
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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).
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.
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.
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The US Dollar turned north this past week, partially losing its pace on Thursday, as speculative interest took a break ahead of the United States (US) employment figures scheduled for Friday. On the contrary, the Euro remained on the back foot as the economic future remains uncertain. As a result, EUR/USD retreated below the 1.0800 mark, edging sharply lower for a second consecutive week.