|

EUR/USD challenges 1.2300 ahead of US Payrolls

  • The pair keeps the tight range around the 1.2300 handle on Friday.
  • Demand for EUR stays subdued as markets digest Thursday’s ECB.
  • US labour market figures due next with wage inflation in centre stage.

EUR/USD remains under pressure at the end of the week in the 1.2300 neighbourhood, all amidst a renewed bid tone around the greenback as market participants continue to digest yesterday’s cautious tone from the ECB.

EUR/USD now looks to US docket

The pair stays under downside pressure on Friday following the ECB meeting, where the central bank dropped its easing bias although it remains somewhat concerned over the absence of upside traction in inflation.

The greenback, instead, seems to have recovered the smile and is now looking to consolidate the breakout of the critical 90.00 milestone, against a backdrop of shrinking geopolitical risks and with US tariffs already in the rear-view mirror.

In fact, President Trump has agreed to meet North Korean leader Kim Jong-un, probably in May. The news adds optimism to the recently announced intentions of denuclearization by North Korea.

Nothing worth mentioning on the data front in the euro area, leaving all the attention to the publication of US Non-farm Payrolls for the month of February, expected at 200K. Furthermore, Average Hourly Earnings will also be in centre stage in light of the strong rebound seen in January.

Additionally, Boston Fed E.Rosengren (2019 voter, dovish) and Chicago Fed C.Evans (2019 voter, centrist) will also speak later in the day.

EUR/USD levels to watch

At the moment, the pair is losing 0.15% at 1.2293 and a break below 1.2240 (55-day sma) would target 1.2206 (low Feb.9) en route to 1.2165 (low Jan.18). On the upside, the next hurdle emerges at 1.2446 (high Mar.8) seconded by 1.2537 (high Jan.25) and then 1.2557 (2018 high Feb.18).

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

AUD/USD hits eight-month lows below 0.6850 amid bullish USD

AUD/USD stays defensive below 0.6850, hitting an eight-month low in the Asian session on Thursday as the possibility of a steeper Fed rate hike in December helps the US Dollar hold near its highest level since April 2025. Geopolitical uncertainty also supports the safe-haven buck, while the RBA’s cautious, on-hold stance limits the Aussie.

USD/JPY eases from near 160.00 amid looming intervention risks, BoJ hike bets

USD/JPY retreats slightly from an over two-month high as the recent surge back to the 160.00 psychological mark prompted verbal warnings from Japanese authorities and sparked fears of direct FX intervention. Moreover, data showed that Japan’s wholesale inflation picked up again in October, strengthening the case for a BoJ hike in December and lifting the Japanese Yen. However, a bullish US Dollar, bolstered by odds of a jumbo Fed rate hike in December, could cap the pair's downside.



Gold hits fresh one-week low, eyes $3,950 amid sustained USD buying and Fed hike bets

Gold extends its descending trend for the third straight day, sliding back to $3,950, or its lowest level in more than a week. The US Dollar buying remains unabated amid firming Federal Reserve rate-hike expectations, bolstered by hot US consumer inflation figures. Adding to this, Middle East uncertainties further underpin the safe-haven buck, which, in turn, is seen as a key factor exerting downward pressure on the commodity.

MSCI drops Strategy from indexes: What it means for Bitcoin

Strategy and Bitcoin (BTC) came under fresh pressure late Wednesday after MSCI finalized its decision to remove the Bitcoin treasury company from its global indexes, raising concerns about potential selling pressure on MSTR shares and its future Bitcoin purchases.

Why the US Dollar's rally isn't as strong as it looks

The US Dollar Index (DXY) is back at an 18-month high, but most of its climb since August is the Euro falling. Against a wider group of trading partners, the Dollar has gained half as much, and the Federal Reserve has raised rates once this year. The US Dollar Index, which measures the Dollar against six other currencies, is trading near 103.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.