- EUR/USD is heading into a key resistance level ahead of US jobs date Friday.
- Markets are showing cautionary optimism over easing of lockdown measures.
- Bears looking for a break of the late April lows down at 1.0727 while bulls seek out the 1.09 handle.
EUR/USD has recovered from the 1.0764 lows on Thursday and has reached a high which meets a prior support level guarding room towards the 1.09 handle. At the time of writing, EUR/USD is trading at 1.0828, +0.33% having travelled from a low of 1.0766 to a high of 1.0833.
The US dollar is under pressure towards the end of the week and head of the Nonfarm Payrolls on Friday. At the same time, equities have been performing well, for no particular reason, although buoyed by the abundance of central bank liquidity and elevated by a gradual lifting of lockdowns.
Markets elevated on easing of lockdown restrictions
In Europe, European Central Bank's President Lagarde said it must take all measures to weather crisis and that it is hard to get a read on how badly the economy is. Meanwhile, France has been the latest nation to join the other major European economies in announcing measures to roll back lockdown restrictions. French industrial production fell 16.2% MoM in March and with the tourism trade shattered by COVID-19, the loosening of restrictions on businesses is hoped to revive some activity to gradually get the economy up and running again. This weekend, UK's PM Boris Jonson is scheduled to make an announcement as well, expecting to authorise a limited easing of restrictions, although strict social distancing is expected to remain until late May (26th).
Meanwhile, US Nonfarm payrolls are expected to fall by 21.7 million with unemployment skyrocketing to 16%. "The challenge ahead for the labour market is how many jobs have been permanently displaced and how quickly unemployment will fall," analysts at ANZ Bank explained.
EUR/USD levels
The price action has seen the pair grind higher from a key support zone in the 1.0760s (early April support) with bulls now testing the prior support if the drop from the 1.09 handle. A break here, 1.0840, opens the 1.09 handle again. Failure here will likely see the bears capitalise ina cheaper dollar looking for a break of the late April lows down at 1.0727.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Optimism price could fall as nearly $90 million worth of OP tokens is due flood markets
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.