EUR/USD: NFP may fail to meet sky-high estimates, triggering a bounce

EUR/USD has tumbled down in response to a trio of upbeat US figures and taper speculation. On Friday, all eyes are on US Nonfarm Payrolls, which could fall short of elevated estimates – triggering a bounce, FXStreet’s Analyst Yohay Elam briefs.

Friday's four-hour chart is showing EUR/USD is near oversold conditions

“Nonfarm Payrolls are set to show a leap of 664,000 positions in May, far above 266,000 initially reported for April. Even with a robust number for May on top of an improved figure for April, the Fed will still likely assess that at least seven million people have yet to return to their pre-pandemic jobs.”

“The euro remains supported by the rapid drop in COVID-19 cases in the old continent, but that is mostly priced into the euro. The EU is preparing to auction its new bonds to fund its special aid package.” 

“Euro/dollar is suffering from downside momentum on the four-hour chart and has dropped below the 200 Simple Moving Average. However, the Relative Strength Index is nearing the 30 mark, and falling below that level would put the pair in oversold territory.” 

“Some support awaits at the daily low of 1.2105, followed by 1.2055, a cushion from mid-May.”

“Some resistance is at the daily high of 1.2130, followed by 1.2160, 1.2175 and 1.22, which played a role in EUR/USD's trading in recent weeks.”