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EUR/USD: Bears may rely on US jobs report after ECB’s dovish surprise

The EUR/USD pair is trading near 1.1200 while heading towards European session on Friday.
ECB’s dovish stint dragged the pair to a 20-month low on Thursday.
German factory orders and the US employment data will be crucial to watch.

EUR/USD is trading around 1.1200 before European sessions on Friday. The pair slumped to a 20-month low on Thursday after the European Central Bank (ECB) joined the chorus of dovish central bankers. Traders may now look for monthly details of German factory orders for intermediate direction ahead of focusing on the US employment data for fresh impulse.

The ECB provided a dovish surprise to global markets on Thursday. The regional central bank revised down its gross domestic product (GDP) forecasts for the years 2019 and 2020 while cutting down on inflation predictions for 2019, 2020 and 2021. Additionally, forward guidance to the interest rate was also changed from “through the summer of 2019” to “at least through the end of 2019”. Furthermore, additional TLTRO were introduced with varied frequency.

Having witnessed heavy selling pressure on Thursday, traders adhere to short-covering moves before the European traders take the command.
Seasonally adjusted German Factory Orders for January month could help to extend recovery if matching +0.5% growth forecast against -1.6% earlier contraction.

Though, major attention will be on the February month US employment data up for 13:30 GMT. Market consensus suggests an increase in average hourly earnings to 3.3% and a dip in the unemployment rate to 3.9% compared to earlier prints of 3.2% and 4.0% respectively. The nonfarm payrolls may decline to 180K from 304K.

While likely improvement in German figures could offer intermediate strength to the EUR/USD pair, the overall strength of the US jobs report might continue hurting the prices.

EUR/USD Technical Analysis

The EUR/USD pair can continue signaling 1.1110 and 1.0980 unless it trades beneath 1.1210.

Should buyers manage to come back with an upside clearance of 1.1210, 1.1450 may lure them.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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