EUR/USD puts 1.18 to the test on upbeat NFP

The selling interest around the single currency remains well and sound, with EUR/USD hovering around the 1.1800 region in the wake of the US labour market report for the month of July.

EUR/USD stays capped by 1.1920 so far

EUR/USD keeps the daily negative stance on Friday after the US economy created 1.763 million jobs during last month, surpassing expectations for a gain of 1.6 million jobs and up from June’s 4.791 million (revised from 4.8 million).

Further data showed the jobless rate eased to 10.2% and the critical Average Hourly Earnings – a proxy for inflation via wages – rose 0.2% MoM and expanded 4.8% over the last twelve months, both prints coming in above expectations.

What to look for around EUR

EUR/USD pushed higher and recorded new highs near 1.1920 on Thursday, triggering the subsequent leg lower to around a cent lower. The July rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery in the wake of the coronavirus fallout. Also lending wings to the momentum around the euro appears the recently clinched deal on the European Recovery Fund – which helped to put political fears within the bloc to rest (for now) – and the solid position of the current account in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.47% at 1.1820 and faces immediate contention at 1.1695 (weekly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the other hand, a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).