EUR/USD remains on the defensive below 100-DMA despite US Consumer Sentiment improvement

The EUR/USD fell decently more than 0.20% during the North American session after it dived to a daily low of 1.0723 courtesy of a slid US Nonfarm Payrolls report. However, after a better-than-expected University of Michigan Consumer Sentiment report, the pair has trimmed some earlier losses. The major is trading at 1.0747.

EUR/USD dropped as US Nonfarm Payrolls exceed estimates, but UoM Consumer Sentiment provides relief

A busy economic calendar in the United States (US) keeps EUR/USD traders entertained. Initially, the Bureau of Labor Statistics (BLS) revealed the economy remains resilient, as the workforce added 199K employees, exceeding the forecast of 180K. At the same time, the Unemployment Rate dropped from 3.9% to 3.7%, while the Average hourly earnings stood unchanged at 4%.

The US Dollar gathered traction on the data’s release, as the EUR/USD dropped toward its daily low before pairing those losses. The US Dollar Index (DXY), which tracks the currency’s performance against six others, registers gains of 0.40%, up at 103.07

The University of Michigan (UoM) Consumer Sentiment recently showed that American households had grown optimistic, snapping four months of declines. The index rose by 69.4, the highest since August, exceeding estimates of 62.0 while inflation expectations slid. Americans estimate inflation in twelve months at 3.1%, down from 4.5%, while for five years, is foreseen at 2.8%, less than November’s 3.2%.

Across the Atlantic, the inflation in Germany slowed to 2.3% as measured by the HICP, below forecasts prior’s month 3%. That has opened the door for a less hawkish reaction by the European Central Bank (ECB), which is expected to hold its monetary policy meeting next week.

EUR/USD Price Analysis: Technical outlook

The EUR/USD daily chart portrays the pair as neutral to downward biased, with sellers in charge, as they dragged the exchange rate below the 100-day moving average (DMA) at 1.0762. A daily close below that level can pave the way toward the 50-DMA at 1.0700. A breach of the latter will expose the November 10 swing low of 1.0655. Conversely, an uptrend resumption could happen if traders reclaim the 100-DMA, opening the door for a rally to 1.0800.