EUR/USD corrects lower to 1.0850 post-Payrolls

EUR/USD reverses initial gains and revisits 1.0850.
US Non-farm Payrolls surprised (largely) to the upside in January.
The US unemployment rate dropped to 3.4%.

Pablo Piovano FXStreet

EUR/USD comes under further downside pressure and rapidly gives away the initial optimism, returning to the mid-1.0800s in the wake of another stellar print from the US jobs report on Friday.

EUR/USD: Gains appear limited near 1.1030 so far

EUR/USD picks up extra selling pressure after the release of the Nonfarm Payrolls showed the US economy added 517K jobs during January, largely surpassing initial estimates for a gain of 185K jobs. In addition, the December reading was also revised up to 260K (from 223K).

Further data saw the Unemployment Rate ticking lower to 3.4% and the key Average Hourly Earnings – a proxy for inflation via wages – rise 0.3% MoM and 4.4% from a year earlier. Additionally, the Participation Rate increased a tad to 62.4% (from 62.3%).

Later in the session, the attention will be on the release of the ISM Non-Manufacturing PMI.

EUR/USD levels to watch

So far, the pair is losing 0.37% at 1.0866. The breakdown of 1.0802 (weekly low January 31) would target 1.0766 (weekly low January 17) en route to 1.0648 (55-day SMA). On the other hand, the immediate up barrier comes at 1.1032 (2023 high February 2) followed by 1.1100 (round level) and finally 1.1184 (weekly low March 31 2022).

Author

Pablo Piovano

FXStreet

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

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