EUR/USD clings to gains above 1.0970 ahead of Payrolls


  • EUR/USD adds to Thursday’s gains beyond 1.0970.
  • Weekly upside so far capped around 1.10.
  • US Payrolls, Fed’s Powell next of relevance later in the day.

The up beat tone around the shared currency remains well and sound for yet another session, with EUR/USD sticking to the positive ground above the 1.0970 level.

EUR/USD now focused on Payrolls, Powell

The pair is advancing for the fourth consecutive session so far on Friday, always on the back of the deteriorated outlook around the Greenback, particularly exacerbated following poor results from the ISM manufacturing and non-manufacturing.

The recent disappointing readings from the US docket have resurfaced the fears of a deeper slowdown in the US economy (recession?) and forced US yields to quickly correct lower to fresh multi-week lows.

There are no scheduled publications in Euroland today other than the speech by ECB’s De Guindos in Seville. Across the pond, the most salient event will be the release of the monthly labour report, where the economy is expected to have added 145K jobs during September and the unemployment rate to have remained unchanged at 3.7.

What to look for around EUR

The pair keeps the weekly recovery well and sound so far today, retaking levels close to the key 1.10 barrier on the back of increasing selling pressure hitting the Greenback. The up move in the pair, however, is seen as corrective only, as the slowdown in the region stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.

EUR/USD levels to watch

At the moment, the pair is advancing 0.09% at 1.0973 and faces the next resistance at 1.0998 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26). On the downside, a breakdown of 1.0879 (2019 low Oct.1) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017).

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