EUR/USD climbs to fresh tops near 1.0630 post-Payrolls

EUR/USD picks up pace and advances to the 1.0625/30 band, or 3-day highs, in the wake of another solid print from the US jobs report on Friday.

EUR/USD stronger on mixed US jobs report

EUR/USD gathers extra upside pressure after the release of the Nonfarm Payrolls showed the US economy added 311K jobs during February, surpassing initial estimates for a gain of 205K jobs. In addition, the January print was revised a tad lower to 504K (from 517K).

Further data saw the Unemployment Rate ticking higher to 3.6% and the key Average Hourly Earnings – a proxy for inflation via wages – rise 0.2% MoM and 4.6% from a year earlier. Additionally, the Participation Rate increased a tad to 62.5% (from 62.4%).

What to look for around EUR

EUR/USD finds some courage and advances beyond the 1.0600 barrier following another release of the US NFP for the month of February, extending at the same time the optimism seen in the second half of the week.

In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB after the bank has already anticipated another 50 bps rate raise at the March event.

Back to the euro area, the likely continuation of the normalization process by the ECB beyond the March meeting carries the potential to reignite recession concerns.

Key events in the euro area this week: Germany Final Inflation Rate, ECB Lagarde (Friday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle amidst dwindling bets for a recession in the region and still elevated inflation. Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.

EUR/USD levels to watch

So far, the pair is advancing 0.46% at 1.0628 and the breakout of 1.0694 (monthly high March 7) would target 1.0712 (55-day SMA) en route to 1.0804 (weekly high February 14). On the downside, the initial support comes at 1.0524 (monthly low March 8) seconded by 1.0481 (2023 low January 6) and finally 1.0323 (200-day SMA).