EUR/USD stages limited rebound after US NFP data, stays near mid-1.1800s
- EUR/USD recovered its losses after dropping toward 1.1800.
- Nonfarm Payrolls in US rose more than expected in June.
- US Dollar Index consolidates weekly gains around 92.50.
The EUR/USD pair fell to its lowest level since early April at 1.1808 in the early American session on Friday but managed to stage a rebound. After turning positive on the day above 1.1850, however, the pair lost its momentum and was last seen posting small daily losses at 1.1844.
The data published by the US Bureau of Labor Statistics revealed on Friday that Nonfarm Payrolls increased by 860,000 in June. With this reading beating the market consensus of 700,000, the US Dollar Index (DXY) jumped to a fresh multi-month high of 92.74 with the initial reaction. Nevertheless, the greenback struggled to preserve its strength and allowed EUR/USD to reverse its direction.
Underlying details of the report showed that the Unemployment Rate edged higher to 5.9% while the Labor Force Participation Rate stayed unchanged at 61.6%. Currently, the DXY is virtually unchanged on the day at 92.52.
Earlier in the day, the data from the euro area showed that the Producer Price Index (PPI) rose to 1.3% in May from 0.9% in April but this data was largely ignored by market participants.
EUR/USD near-term outlook
According to Credit Suisse analysts, EUR/USD could target 1.1767 with a break below 1.1824.
“The next short-term support is seen at the 78.6% retracement of the March/May rally just below at 1.1824, which the market is testing this morning,” analysts said. “A break below here is expected, which should see a move to the lower end of the converging range, now at 1.1767. More important medium-term support remains at 1.1703/1.1695, with only a weekly close below here suggesting a medium-term trend turn.”
EUR/USD: Key resistance at 1.1976/2001 to cap even on NFP miss – Credit Suisse.
Additional levels to watch for