EUR/USD struggling to break through 1.06 handle, NFP in focus

Haresh Menghani FXStreet

The EUR/USD pair maintained its bid tone for the second straight session, albeit continued with its struggle to decisively break through the 1.0600 handle.

Currently trading around 1.0590 region, the better-than-expected German trade balance data provided little impetus and the pair held below previous session's ECB-led swing highs. German trade surplus came-in slightly above estimates, at €18.5 billion for January vs €18.0 billion expected. The positive data, however, seems to have been negated by a downward revision of previous month's surplus, now standing at €18.7 billion as against €24.0 billion reported earlier.

Moreover, continuous up-surge in the US treasury bond yields, against the backdrop of an imminent Fed rate-hike action next week, also seems to collaborate towards capping any further up-move for the major.

Meanwhile, Thursday's hawkish comments from the ECB President Mario Draghi, hinting towards a shift in the bank’s stance away from offering further stimulus, helped the pair to hold in positive territory through early European session.

Investors on Friday will remain focused on the keenly watched US monthly jobs report. After Wednesday's stellar ADP report, market participants now seem to anticipate the official NFP data to print a solid headline number, with consensus estimates point to an addition of 190K new jobs for February.

Technical levels to watch

A follow through retracement below 1.0575 immediate support level is likely to get extended back towards 1.0540 intermediate support, below which the pair is likely to aim towards testing the key 1.0500 psychological mark.

On the upside, momentum above the 1.0600 handle is likely to confront resistance near 1.0625 level, which if cleared decisively has the potential to lift the pair beyond multi-week highs resistance near 1.0640 area, towards reclaiming 1.0700 round figure mark.

1. R3 1.0715
2. R2 1.0665
3. R1 1.0624
PP 1.0574
1. S1 1.0533
2. S2 1.0483
3. S3 1.0442

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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