EUR/USD Stabilizes in Tight Range as Market Digests US Jobs Data

During Monday’s Asian trading session, the EUR/USD pair exhibited restrained fluctuations, stabilizing within a narrow band as it consolidates the substantial gains secured last week, when it reached its highest level since September 14 on Friday. Despite this, spot prices linger beneath the mid-1.0700s, influenced by a slight resurgence of the US Dollar (USD).

The USD Index (DXY), a gauge of the Dollar’s performance against a basket of currencies, has partly rebounded from the significant losses suffered on Friday, which had plunged the index to a six-week nadir following the release of softer-than-expected US employment figures. The closely monitored Non-Farm Payroll (NFP) report indicated that the US economy added merely 150K jobs in October, falling short of the 180K forecast and also revising the previous month’s figures downward from 336K to 297K.

This data appears to have solidified market anticipations that the Federal Reserve (Fed) might maintain its current interest rate stance in the upcoming December meeting, contributing to a further dip in US Treasury bond yields. Additionally, the prevailing risk-on mood in the markets has exerted pressure on the safe-haven appeal of the Greenback.

However, the USD’s extremely oversold conditions on hourly charts have deterred traders from initiating new bearish positions.

The fundamental backdrop, as highlighted, seems to favor a downward trajectory for the Greenback, bolstering the likelihood of an imminent upward trend for the EUR/USD pair. Market participants are now shifting their focus to the final Eurozone Services PMI data, which could sway USD pricing dynamics and create short-term trading opportunities for the EUR/USD pair.

Technical Analysis:

The EUR/USD pair is exhibiting increased bullish momentum, inching closer to the anticipated target of 1.0760 within a supportive bullish channel. This trajectory enhances the possibility of breaching this level, potentially paving the way for further bullish correction in subsequent sessions, with an eye on reaching the 1.0860 region as the next significant milestone.

Consequently, an extension of the current uptrend is anticipated in the intraday scenario, bolstered by the EMA50. It’s crucial to note, however, that a failure to surpass the 1.0760 mark could trigger a bearish reversal, prompting the price to retest the crucial 1.0640 support level before clearly defining its subsequent direction.

Today’s projected trading range lies between the 1.0660 support and the 1.0810 resistance levels.

EUR/USD Live Chart