EUR/USD pulls back below 1.1300, turns negative on the day

The euro is about to put an end to an 8-day winning streak which has pushed the pair from 1.0890 lows on late may to nearly three-month highs right below 1.1400. EUR/USD has peaked at 1.1380 before pulling down sub 1.1300, weighed by US dollar strength after better-than-expected US employment data.

The dollar bounces up after US NFP data

The euro has turned down from 1.1385 highs, weighed by US dollar strength on the back of an unexpected increase on US Non-Farm Payrolls. The US Labor Department has reported an increment of 2.509 million jobs, against market expectations of an 8 million decline, following a record drop of 20.687 million in April.

Beyond that, the unemployment rate has dropped to 13.3% in May from 14.7% in April, with average hourly earnings contracting 1.0% in May, and increasing 6.7% over the last 12 months.

The euro, however, is on track to complete a three-week rally, which has pushed the common currency 4,5% up. The global risk sentiment amid signs of a moderate economic recovery plus the bold ECB action to support the worst COVID-19-hit countries and sectors have been the main driver of the steady EUR uptrend.

Payrolls data might make the USD great again – TD Securites

The FX analysis team at TD Securities warn about the impact of the surprising increase on May’s US payrolls, as they might put a cap EUR strength, “NFP might give credence to a rotation back to the US, however. This is especially the case if markets rethink whether accommodative policy will end sooner or if the US may outperform its peers on growth. A rotation in the pro-risk stance could see the USD recover from deeply oversold levels.”