EUR/USD oscillates around crucial support of 0.9730 as hawkish Fed bets soar

The EUR/USD pair is juggling around the crucial cushion of 0.9730 in early Tokyo and is expected to remain prepared for testing more supports. The major is displaying a tough time scenario around the afore-mentioned support and may drop to near the 0.9700 round-level resistance as odds of a 75 basis point (bps) rate hike by the Federal Reserve (Fed) has advanced significantly.

As per the CME Fedwatch tool, chances of a 75 bps rate hike announcement by the Fed have soared to 82%. The reason behind the escalating possibility of a fourth consecutive 75 bps rate hike is the better-than-projected US Nonfarm Payrolls (NFP) data. The US economy has added 263 fresh jobs in September month vs. the expectation of 250k and the prior release of 315k. The release of the upbeat employment generation data directs the US dollar index (DXY) to hit the round-level resistance of 0.9700.

Also, the better-than-expected US NFP brought party for yields. The 10-US US Treasury yields continued their winning streak for four-trading sessions and hit a 3.91% figure. The yields are expected to extend further to the psychological resistance of 4% as the risk-off profile has been underpinned by the market participants. The upbeat US NFP will support the Fed to announce a 75 bps rate hike unhesitatingly. So confident Fed policymakers will continue to discuss the 75 bps and the risk-off profile will continue to remain in traction.  

Investors should be aware of the fact that US markets are closed on Monday on account of Columbus Day.

On the Eurozone front, the shared currency bulls are underperforming on subdued German Retail Sales data. The annual Retail Sales have declined by 4.3% but remained better than the expectations of a decline of 5.1%. While the monthly catalyst declined by 1.3% than the projections of a drop by 1%.