- EUR/USD portrays typical pre-NFP trading lull at five-month high.
- ECB President Christine Lagarde cites economic uncertainty, need for fiscal policy to defend the bloc.
- Downbeat comments from IMF’s Georgieva, anxiety ahead of US NFP also probe bulls.
- Hopes of Fed’s slower rate hike, downbeat expectations from US data favor buyers.
EUR/USD portrays the market’s cautious mood as it steadies near a five-month high surrounding 1.0530 during early Friday.
That said, the major currency pair’s latest inaction could be linked to the mixed concerns surrounding likely downbeat US employment data and economic fears cited by the key policymakers from the US and Europe.
Recently, European Central Bank (ECB) President Christine Lagarde mentioned the need for short-term and bespoke fiscal policy. The policymaker also said, “For sustainable growth, all policies must work together.”
Further, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that recession risks are rising for many countries, and the outlook for global growth is exceptionally uncertain and dominated by risks. The same challenged the market sentiment and allowed the US Dollar Index (DXY) to take a breather around the lowest levels since early July.
Even so, a record-low Unemployment Rate in the bloc joins dovish comments from the majority of the Fed policymakers, including Chairman Jerome Powell, to keep the EUR/USD buyers hopeful.
Against this backdrop, the S&P 500 Futures drop 0.30% intraday to 4,070 whereas the US 10-year Treasury yields printed a corrective bounce off the 10-week low to 3.54% by the press time.
Moving on, EUR/USD may remain inactive amid a light calendar ahead of the US jobs report and cautious mood. However, the bulls are likely to stay in the driver’s seat as the headline Nonfarm Payrolls (NFP) is expected to ease to 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%.
Technical analysis
A four-month-old upward-sloping previous resistance line, now support near 1.0500, restricts short-term EUR/USD downside. Meanwhile, the pair’s upside moves could aim for the late June swing high near 1.0615.
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