- EUR/USD sits tight ahead of the all-important NFP report schedule for the US session.
- Bears are looking for a weekly bearish close on a solid NFP report.
Risk appetite remained firm on Thursday following the Bank of England's surprise hold which led to yield curves shifting lower across geographies as traders stepped off the peddle with respect to interest rate expectations. Nevertheless, EUR/USD fell to a one-month low, falling from 1.1615 to 1.1528. The pair then steadied around 1.1555 into Asia and sits between there and 1.1545 the low so far today in Tokyo.
The US dollar was on course for a second straight week of gains against major peers on Friday as traders bought the dip in the greenback, expecting a solid outcome from today's showdown in the US Nonfarm Payrolls report that could sway the timing of Federal Reserve interest rate increases.
''Non-farm payrolls should see a strong gain in October (market median f/c +450k, Westpac +500k),'' analysts at Westpac explained. ''The unemployment rate should edge down to 4.7% despite higher participation. Average hourly earnings are meanwhile expected to rise at a robust pace as labour shortages continue to support wage growth.''
The dollar index DXY, which measures the greenback against a basket of six rivals, climbed from the post-Federal Reserve meeting lows of 93.82 to a high of 94.47 and rallied 0.51% on Thursday. That lifted it into the positive for the week, so far, adding 0.21%.
Central bank sentiment weighs on EUR/USD
Overall, investors have been forced to reset monetary policy expectations this week, after some of the biggest central banks knocked back bets for early rate hikes which have helped support the greenback. For instance, the European Central Bank President Christine Lagarde pushed back on Wednesday against market bets for a rate hike as soon as next October and said it was very unlikely such a move would occur in 2022.
Also on Wednesday, Fed Chair Jerome Powell said he was in no rush to hike borrowing costs, even as the Federal Open Market Committee announced a $15 billion monthly tapering of its $120 billion in monthly asset purchases. Nevertheless, should the data impress on Friday, amongst a sold backdrop of PMIs this week, the greenback could remain on the front foot for the foreseeable future and weigh on EUR/USD.
EUR/USD technical analysis
In line with the fundamentals, the signal currently is technical under pressure as well:
From a weekly perspective, the price is in the running for a bearish close as illustrated above.
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
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.