EUR/USD maintained its upward momentum for the second consecutive day, reaching above 1.1100 and consolidating in the European session on Friday. The bullish bias is expected to continue as investors await the release of the US Bureau of Labor Statistics’ August jobs report.
Thursday’s data from the Automatic Data Processing revealed a lower-than-expected increase of 99,000 jobs in the private sector for August. This result led to a selloff in the US Dollar (USD) and supported the ongoing rally in EUR/USD.
The upcoming Nonfarm Payrolls (NFP) report for August is forecasted to show a rise of 160,000 jobs, following a disappointing increase of 114,000 in July. A positive surprise in the NFP data could lead to a stronger USD and a correction in EUR/USD towards the downside.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator suggests that EUR/USD has room for further upside before becoming overbought. Key resistance levels include 1.1160, 1.1200, and 1.1250, while support levels are at 1.1100, 1.1040, and 1.1000.
Nonfarm Payrolls FAQs
- Nonfarm Payrolls measure the change in US employment, excluding the farming industry.
- NFP figures impact the Federal Reserve’s decisions on interest rates and inflation.
- Higher NFP results typically strengthen the USD and influence monetary policy expectations.
- NFPs have a negative correlation with Gold prices due to their impact on USD value and interest rates.
- NFP is just one component of a larger jobs report and can be overshadowed by other factors.
Analysis:
The EUR/USD pair is currently experiencing a bullish trend, supported by lower-than-expected job growth in the US private sector. As investors await the NFP report, the outcome could lead to further movements in the currency pair. A positive NFP result may strengthen the USD, while a negative surprise could extend the rally in EUR/USD. Traders should monitor key support and resistance levels to make informed decisions based on technical analysis and market dynamics.