EUR/USD extends the rebound from earlier cycle lows.
The unemployment rate remained at 3.6%.
Despite the rebound from lows, the selling interest around the single currency remains well and sound and motivates EUR/USD to keep the price action subdued around 1.0100/15 at the end of the week.
EUR/USD still faces a potential drop to parity.EUR/USD keeps the negative stance on Friday after the release of the Nonfarm Payrolls showed the US economy created 372K jobs during June, surpassing initial estimates for a gain of 268K jobs. The May reading was revised down to 384K (from 390K).
Further data saw the jobless rate unchanged at 3.6%, and the key Average Hourly Earnings – a proxy for inflation via wages – rise 0.3% MoM and 5.1% from a year earlier. Additionally, the Participation Rate eased a little to 62.2%.
What to look for around EUR
Bears maintain the EUR/USD under heavy pressure, and the acceleration of the downside opens the door to a probable visit to the parity level sooner rather than later.
Indeed, the pair’s price action remains depressed and keeps closely following rising speculation around a probable recession in the region, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.
Key events in the euro area this week: ECB Lagarde (Friday).Eminent issues on the back boiler: Fragmentation risks. Kickstart of the ECB hiking cycle in July? Asymmetric economic recovery post-pandemic in the euro bloc. Impact of the war in Ukraine on the region’s growth prospects and inflation.
EUR/USD levels to watch
So far, spot is down 0.16% at 1.0140 and faces the next contention at 1.0071 (2022 low July 8) seconded by 1.0060 (low December 11 2002) and finally 1.0000 (psychological level). On the upside, a breakout of 1.0538 (55-day SMA) would target 1.0615 (weekly high June 27) en route to 1.0773 (monthly high June 9).
EUR/USD falls below 1.0150 after US jobs report
EUR/USD has failed to extend its recovery after the June jobs report from the US and started to push lower toward 1.0100. Nonfarm Payrolls in the US rose by 372,000 in June and the Unemployment Rate remained unchanged at 3.6%, boosting the greenback.
GBP/USD struggles to extend recovery beyond 1.2000 after US NFP
GBP/USD is having a difficult time gathering recovery momentum following the earlier decline. With the dollar preserving its strength on the better-than-expected Nonfarm Payrolls print for June, the pair continues to trade in negative territory below 1.2000.
Gold turns south after spiking above $1,750 on US data
Gold jumped above $1,750 with the initial reaction to the Nonfarm Payrolls report in the early American session but ended up reversing its direction. With the benchmark 10-year US Treasury bond yield rising nearly 3% on the day, XAU/USD trades in negative territory below $1,740.