EUR/USD aims extension of recovery above 1.0200 on lower expectations for the US NFP
- EUR/USD is attempting to extend its recovery above 1.0200 as investors expect a downbeat US NFP.
- A preliminary estimate for the US NFP is 270k, lower than the prior print of 390k.
- Stable Average Hourly Earnings in the US may hurt the paychecks of the households.
The EUR/USD pair has attracted some bids after sensing exhaustion signals near 1.01610. A dead cat bounce is supporting the shared currency bulls and now the same are attempting to extend their recovery above 1.0200. The asset has rebounded modestly as the US dollar index (DXY) is facing the corrective phase after printing a fresh 19-year high at 107.24 on Wednesday. The DXY has surrendered the critical support of 107.00.
The DXY witnessed decent attention on Wednesday after the release of the hawkish Federal Open Market Committee (FOMC) minutes. Only one FOMC member was not in support of announcing a 75 bps rate hike by the Federal Reserve (Fed). The guidance is also highly restrictive if price pressures persist for longer.
Going forward, the spotlight will remain on the US employment data. As per the market consensus, the US economy has flooded the job market with additions of 270k fresh jobs in June. The figure is lower than the prior release of 390k. The Unemployment Rate is seen unchanged at 3.6%. The catalyst which could hurt the market sentiment is the Average Hourly Earnings. The economic data may remain stable at 5.2%, however, the inflation rate has climbed to 8.6%. This will hurt the paychecks of the households further and eventually will dampen the overall demand.
On the eurozone front, recession fears are hurting the shared currency bulls on a broader note. The gas supply tensions between Europe and the UK economy are haunting the shared currency bulls. The UK administration announced that the economy will stop supplying gas to mainland Europe if it hits shortages in the coming months.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
