EURUSD Sellers Test 1.08 After Strong May NFP Numbers

The stronger-than-expected US non-farm payroll data has propelled the EUR to USD rate, leading to new lows for the week in EUR/USD. Currently, the pair is testing the key support zone around the 1.08 level and the 200 moving average (purple), ending up lower for the week.

ECB President Lagarde’s comments suggesting a potential delay in further interest rate cuts provided a boost to the market sentiment, particularly for the euro. While the interest rate reduction announced by the ECB had already been anticipated by the market, Lagarde’s remarks alleviated concerns about immediate further cuts, leading to reduced turbulence in the currency markets.

EUR/USD Chart H4 – Sellers Testing the 200 SMA

The EUR/USD pair experienced upward movement following Lagarde’s comments, despite the euro’s reduced interest rates. Lagarde’s indication that future rate cuts would depend on inflation statistics implied a cautious approach by the ECB towards monetary policy adjustments. This perceived stance towards maintaining relatively higher interest rates in the eurozone, unless warranted by inflationary pressures, contributed to the strengthening of the euro against the US dollar, sending this pair to 1.09.However today we saw a total reversal and a 1-cent decline so far.

May 2024 US employment data from the non-farm payroll’s report

Overall, the May employment report reflects a strong and resilient labor market, with robust job gains and increasing wages. Despite some minor fluctuations in the unemployment rate and labor force participation, the overall trend remains positive, calming the fears after several weak jobs reports in the previous weeks. This data suggests continued economic expansion and provides support for expectations of future growth, so analysts are pushing the first FED interest rate cut further back.

EUR/USD Live Chart