- EUR/USD corrects slightly lower from 1.1170.
- The Greenback remains flat in the area of weekly lows.
- Focus of attention stays on Payrolls and ISM manufacturing.
The buying interest around the single currency remains well and sound so far this week, with EUR/USD meandering the upper end of the range around 1.1170.
EUR/USD now looks to Payrolls
Spot is extending the upside for the fifth consecutive session so far on Friday, always tracking the poor performance of the Greenback, which has almost fully faded last week’s recovery.
Despite investors’ attention in past hours shifted to the re-emergence of trade concerns (after Chinese officials talked down the possibility of a permanent US-China trade deal in the longer run), the pair kept the bid tone unaltered as it remains supported by the recent interest rate cut by the Fed.
Later in the day, all the attention is expected to be on the release of US Non-farm Payrolls, where a modest job creation of 85K is seen during October mainly due to a strike in one of the largest US carmakers. In addition, the ISM manufacturing is also due and consensus sees a rebound from September’s poor prints.
What to look for around EUR
EUR has managed to return to the upper bound of the monthly range, always on the back of unabated selling pressure in the buck. Despite the October rally in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.
EUR/USD levels to watch
At the moment, the pair is gaining 0.05% at 1.1156 and faces the next up barrier at 1.1179 (monthly high Oct.21) seconded by 1.1186 (61.8% Fibo of the 2017-2018 rally) and finally 1.1196 (200-day SMA). On the downside, a breakdown of 1.1072 (low Oct.25) would target 1.1043 (55-day SMA) en route to 1.0925 (low Sep.3).
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