- US Dollar under pressure across the board amid risk appetite and falling yields.
- US: A weak ISM Service sector report follows larger than expected increase in NFP.
- EUR/USD having best day in a month, still down for the week.
The EUR/USD jumped above 1.0600 amid a sharp reversal of the US Dollar that tumbled across the board following the ISM Service PMI report. The pair rose 1.25% from the daily low and is having the best day in a month.
NFP and ISM
The first leg lower of the US Dollar followed the release of the Nonfarm Payroll report. The economy added 223K in December which represents a slowdown from the prior month and shows the job market remains in good shape. The unemployment rate dropped to 3.5%.
More recently, ISM Service PMI index came in at 49.6 in December, well below the 55 of market consensus. The Price Paid Index fell unexpectedly from 70 to 67.6. The report triggered concerns about a potential “hard landing” for the US economy. At the same time, the jobs numbers keep the debate open about the next Federal Reserve rate hike by 25 or 50 basis points.
After the figures, the Greenback accelerated the decline across the board as US yields tumbled. The US 10-year yield fell from 3.75% to 3.61%, the lowest level since December 20. European yields are also sharply lower. The German 10-year bond yield fell to 2.19%, the lowest since December 19, while the Italian 1-year fell to 4.19%.
The EUR/USD peaked at 1.0613, more than a hundred pips above the one month low it hit earlier at 1.0483. Euro bulls are now looking at the 1.0635 area that is the next resistance. Ahead of the weekend the bias is bullish while above 1.0550.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD looks at the RBA for near-term direction
AUD/USD resumed its rebound and briefly surpassed the 0.6600 barrier on the back of the renewed and marked resurgence of the downward bias in the US Dollar. Investors, in the meantime, expect the RBA to keep its rates unchanged on Tuesday.
EUR/USD: Price action hinges on the US election and the Fed
EUR/USD managed to trespass the key 1.0900 hurdle and print new highs following the Greenback’s offered stance as investors warmed up for the US election and the FOMC event later in the week.
Gold trades around $2,730
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum (ETH) is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.