EURUSD currency pair recently broke the support zone between the support level 1.1600 (which stopped earlier correction (2)) and the 61.8% Fibonacci correction of the upward impulse (1) from March.
This weekly EUR/USD outlook was written before the end of European session on Friday and was therefore subject to some volatility during the NY session. At the time of writing, the US dollar looked set to finish the week on a strong footing after a much stronger-than-expected labour market report prompted investors to reassess the outlook for Federal Reserve policy, sending yields higher.
EUR/USD is under renewed pressure after breaking below a key support zone in the wake of a stronger-than-expected U.S. Non-Farm Payrolls report today. The move reinforces the broader downtrend that has been in place since the April highs and shifts focus to whether sellers can secure a weekly close below support.
The Euro firmed on Friday and probes again through initial barrier at 1.1635 (daily cloud base / daily Tenkan-sen) after short-lived cloud penetration on Thursday which left daily candle with long upper shadow.
The US jobs report is due shortly, before attention turns to US CPI and ECB rate decision next week for the EUR/USD traders. Of course, the bigger issue is oil prices and the Strait of Hormuz.
Ahead of today's critical US Nonfarm Payrolls release, the EUR/USD pair has been grinding sideways around the 1.1610-1.1620 zone, showing resilience amid a fundamentally strong US Dollar environment.
EUR/USD was trading at 1.1613 on Friday. As the week draws to a close, the US dollar remains on track to post gains, supported by ongoing uncertainty in the Middle East and continued demand for safe-haven assets.
EUR/USD is showing resilience ahead of the closely watched US Nonfarm Payrolls report as investors weigh diverging economic growth trends against converging central bank hawkishness. While the US labour market remains stable enough to support a higher-for-longer Federal Reserve stance, the ECB is expected to continue tightening policy amid persistent inflation.
Euro: Downside risks toward key supports against US Dollar – UOB
The beginning of a new month marks a good opportunity to review the seasonal patterns that have influenced the forex market over the 50+ years since the Bretton Woods system was dismantled in 1971, ushering in the modern foreign exchange market.
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