• EUR/USD hovers around 1.0900 after hitting a low of 1.0876.
  • US Nonfarm Payrolls rose below forecast but cemented the case for a 25 bps Fed rate hike.
  • ECB’s Knot: Further rate hikes need, and no rate cuts in 2023.

The EUR/USD falls during the North American session and retraces towards the 1.0900 figure after a solid US Nonfarm Payrolls report. However, the Euro (EUR) is set to finish the week with decent gains of 0.61%, though it ended short of reclaiming 1.1000. At the time of writing, the EUR/USD is trading at 1.0910, below its opening price by 0.07%.

EUR/USD clings to 1.0900 on mixed US jobs data

The US economic docket featured March’s jobs report, revealed by the US Department of Labor. Payrolls rose below estimates of 240k and hit 236K, but the data insights triggered a jump in odds for a US Federal Reserve’s (Fed) 25 bps rate hike. The Participation Rate jumped to 62.6%, from 62.4% foresaw, and the Unemployment Rate remained unchanged at 3.6% YoY. Average Hourly Earnings fell to 4.2% annually basis, beneath the consensus.

Therefore, US Treasury bond yields extended their gains, with the 2-year US T-bond yield, the most sensitive to interest rates, climbing 16 basis points. The Fed swaps are repricing the May monetary policy meeting, with odds for a 25 bps rate hike by the US Federal Reserve itching up, to 67.0%, compared to Thursday’s 49.2%, as shown by the CME FedWatch Tool.

Even though the European (EU) economic docket was absent, Klas Knot, an European Central Bank (ECB) Governing Council Member, had crossed the wires. Knot commented the ECB is not done with interest rate hikes, as core inflation remains at 6%, three times the ECB’s 2% target.

“The only question is whether you still need to take a further step up by half a percentage point, like the last few times we raised rates, or can you already scale back to smaller increments of a quarter of a percentage point,” he said.

When asked about cutting rates towards the year’s end, Knot described such a scenario as “almost impossible.”

Meanwhile, Worldwide Interest Rate Probabilities (WIRP) show odds for a 25 bps rate hike by the European Central Bank at 90%. Following that, another 25 bps rate increase is expected, and no movement for Q4.

What to watch?

The EU’s docket will feature Retail Sales, Industrial Production, Germany’s inflation, and a round of ECB speakers throughout the week. On the US front, the calendar will feature the Consumer and the Producer Price Index (CPI/PPI) for March, the FOMC’s last meeting minutes, Jobless Claims, and Retail Sales on the data side. The Fed parade will continue during the week.

EUR/USD Technical Levels

EUR/USD

Overview
Today last price 1.0911
Today Daily Change -0.0012
Today Daily Change % -0.11
Today daily open 1.0923
 
Trends
Daily SMA20 1.079
Daily SMA50 1.0734
Daily SMA100 1.0674
Daily SMA200 1.035
 
Levels
Previous Daily High 1.0938
Previous Daily Low 1.0884
Previous Weekly High 1.0926
Previous Weekly Low 1.0745
Previous Monthly High 1.093
Previous Monthly Low 1.0516
Daily Fibonacci 38.2% 1.0917
Daily Fibonacci 61.8% 1.0905
Daily Pivot Point S1 1.0892
Daily Pivot Point S2 1.0862
Daily Pivot Point S3 1.0839
Daily Pivot Point R1 1.0946
Daily Pivot Point R2 1.0968
Daily Pivot Point R3 1.0999

 

 

 
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