EUR/USD trades with a mild positive bias, lacks bullish conviction ahead of the US NFP report

EUR/USD attracts some buying for the second straight day, though lacks bullish conviction.
A positive risk tone prompts some USD profit-taking and lends some support to the major.
Elevated US bond yields should limit losses for the buck and cap the pair ahead of the NFP.

Haresh Menghani FXStreet

The EUR/USD pair edges higher for the second straight day on Friday and looks to build on the overnight bounce from the vicinity of the 1.0900 mark, or its lowest level since July 7. Spot prices currently trade just above mid-1.0900s, up over 0.10% for the day, and draw support from subdued US Dollar (USD) demand.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, remains on the defensive below a four-week high touched on Thursday amid some profit-taking ahead of the crucial US monthly employment details. The popularly known NFP report is due for release later this Friday and influence market expectations about the Federal Reserve's (Fed) future rate-hike path. This, in turn, will play a key role in driving demand for the buck in the near term and help investors to determine the next leg of a directional move for the EUR/USD pair.

In the meantime, a generally positive tone around the US equity futures is seen undermining the safe-haven Greenback. That said, the prospects for further policy tightening by the US central bank should help limit any meaningful corrective decline. In fact, the incoming US macro data points to an extremely resilient economy and lifts expectations that Fed will have enough headroom to raise interest rates further. This keeps the yield on the benchmark 10-year US government bond elevated near its highest level since late October 2022 and should act as a tailwind for the USD.

Apart from this, speculations that the European Central Bank (ECB) may finally pause its historic hiking campaign soon, along with looming recession risks, might hold back traders from placing aggressive bullish bets around the shared currency. This might further contribute to keeping a lid on the EUR/USD pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent pullback from a 17-month peak set in July has run its course. Nevertheless, spot prices, for now, have managed to defend the 100-day Simple Moving Average (SMA).

Technical levels to watch

EUR/USD

Overview
Today last price	1.0955
Today Daily Change	0.0006
Today Daily Change %	0.05
Today daily open	1.0949

Trends
Daily SMA20	1.1077
Daily SMA50	1.0931
Daily SMA100	1.0917
Daily SMA200	1.0739

Levels
Previous Daily High	1.0963
Previous Daily Low	1.0912
Previous Weekly High	1.115
Previous Weekly Low	1.0944
Previous Monthly High	1.1276
Previous Monthly Low	1.0834
Daily Fibonacci 38.2%	1.0944
Daily Fibonacci 61.8%	1.0932
Daily Pivot Point S1	1.092
Daily Pivot Point S2	1.0891
Daily Pivot Point S3	1.0869
Daily Pivot Point R1	1.097
Daily Pivot Point R2	1.0992
Daily Pivot Point R3	1.1021

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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