The EUR/USD pair recovered most losses and now regains 1.19 handle, closely tracking the USD price-action ahead of the much-awaited US payrolls data.
EUR/USD bounces-off 1.1880
The spot stalled its Asian retreat and resumed its recovery mode back above 1.1900 levels, as Treasury yields reversed gains dragging the US dollar broadly lower. The USD index faced rejection at 92.80 and reverted to 99.65 levels, up +0.06% on the day.
A major turnaround in risk condition witnessed in the European session, in the wake of renewed oil-price declines, lifted the demand for US Treasuries at the expense of the risk assets such as the US yields.
Moreover, expectations of dismal US jobs data weigh negatively on the Fed’s rate hike expectations, in turn undermining the sentiment around the US dollar and Treasury yields. However, the pair struggles to take on the recovery beyond 1.19 handle, as a series of mixed Euro area manufacturing PMIs fail to impress the EUR bulls.
Meanwhile, the latest remarks from the ECB policymaker Nowotny also keeps the recovery limited above 1.19 handle. Moving on, with the Eurozone PMI readings out of the way, all eyes now remain on the US labour market report due to be published at 1230GMT today.
EUR/USD Technical Set-up
Karen Jones, Analyst at Commerzbank, explained: “EUR/USD has sold off to the 2 month uptrend, which is currently holding – this is located at 1.1814. We would allow for an initial rebound from here, but we suspect the market will now struggle to regain the 1.200 level given its robust recent rejection from the 1.2070, we are starting to believe that the market may have topped. The new high has also been accompanied by a divergence of the daily RSI. The 2 month support line guards the 4 month uptrend at 1.1698.”
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