- EUR/USD trades in positive territory above 1.1650 in the European session on Friday.
- August Nonfarm Payrolls data from the US could trigger a strong reaction.
- The technical outlook points to a bullish tilt in the near term.
EUR/USD gains traction and climbs above 1.1650 in the European session on Friday after posting marginal losses on Thursday. The pair’s near-term technical outlook hints at a bullish tilt as investors gear up for the release of the August employment report from the United States (US).
The mixed macroeconomic data releases from the US made it difficult for the US Dollar (USD) to outperform its rivals in the American session on Thursday, helping EUR/USD hold its ground.
The Institute for Supply Management (ISM) reported that Services Purchasing Managers’ Index (PMI) improved to 52 in August from 50.1 in July, reflecting an ongoing expansion in the service sector’s business activity at an accelerating pace. This print came in better than the market expectation of 51. On a negative note, the Automatic Data Processing (ADP) reported that private sector payrolls rose by 54,000 in August, falling short of analysts’ estimate of 65,000.
In the second half of the day, the Bureau of Labor Statistics will publish the employment report for August. Nonfarm Payrolls (NFP) are forecast to rise by 75,000 and the Unemployment Rate is seen edging higher to 4.3%. A disappointing NFP figure of 50K or lower could weigh on the USD heading into the weekend and help EUR/USD continue to push higher.
On the other hand, a positive surprise, with a reading over 100K, could ease fears over worsening conditions in the labor market and support the USD.
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