EUR/USD Price Analysis: Consolidates around mid-1.0500s, focus remains on US NFP

EUR/USD struggles to gain any meaningful traction on Friday and oscillates in a narrow band.
The technical setup seems tilted in favour of bears and supports prospects for further decline.
Traders now await the release of the key US NFP report before placing fresh directional bets.

Haresh Menghani FXStreet

The EUR/USD pair is seen oscillating in a narrow trading band during the Asian session on Friday and consolidating its recovery gains registered over the past two days, from mid-1.0400s or the YTD low touched earlier this week. Spot prices currently trade just below the 1.0550 level, nearly unchanged for the day, as traders keenly await the release of the closely-watched US monthly employment details, popularly known as the NFP report.

Heading into the key data risk, the prospects for further policy tightening remain supportive of elevated US Treasury bond yields and act as a tailwind for the US Dollar (USD). Apart from this, a generally weaker tone around the equity markets further seems to underpin the safe-haven Greenback. This, along with expectations that additional rate hikes by the European Central Bank (ECB) may be off the table for now, contributes to keeping a lid on the EUR/USD pair.

From a technical perspective, the recent decline from a 17-month peak touched in June has been along a descending channel and points to a well-established downtrend. Moreover, the Relative Strength Index (RSI) on the daily chart has also recovered from the oversold territory. Hence, any subsequent move up might still be seen as an opportunity to initial fresh bearish positions around the EUR/USD pair and run the risk of fizzling out rather quickly.

Meanwhile, any positive reaction to a disappointment from the US jobs data could lift spot prices beyond the 1.0600 round-figure mark. The momentum could get extended, though is more likely to remain capped near the top boundary of the aforementioned channel, currently around mid-1.0600s. The latter should act as a key pivotal point, which if cleared will suggest that the EUR/USD pair has formed a nea-term bottom and shift the bias in favour of bulls.

On the flip side, the 1.0500 psychological mark now seems to protect the immediate downside. Some follow-through selling could make spot prices vulnerable to refresh the YTD low and challenge the ascending channel support, near the 1.0420-1.0415 region. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for an extension of the EUR/USD pair's near-three-month-old downward trajectory.

EUR/USD daily chart

Technical levels to watch

EUR/USD

Overview
Today last price	1.0543
Today Daily Change	-0.0003
Today Daily Change %	-0.03
Today daily open	1.0546

Trends
Daily SMA20	1.0619
Daily SMA50	1.0779
Daily SMA100	1.0845
Daily SMA200	1.0826

Levels
Previous Daily High	1.0552
Previous Daily Low	1.05
Previous Weekly High	1.0656
Previous Weekly Low	1.0488
Previous Monthly High	1.0882
Previous Monthly Low	1.0488
Daily Fibonacci 38.2%	1.0532
Daily Fibonacci 61.8%	1.052
Daily Pivot Point S1	1.0513
Daily Pivot Point S2	1.0481
Daily Pivot Point S3	1.0461
Daily Pivot Point R1	1.0565
Daily Pivot Point R2	1.0584
Daily Pivot Point R3	1.0617

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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