- Euro outperforms in a quiet session on Thursday.
- US data points to a softer labor market, NFP due on Friday.
- EUR/USD biased to the upside, likely to face resistance around 1.0950.
The EUR/USD rose on a quiet day, retaking 1.0900 and even reaching 1.0935 before Nonfarm Payrolls and ahead of the Easter holiday. The Euro outperformed while the DXY moved sideways.
On Thursday, Germany reported a 2% increase in Industrial Production in February, in line with the 4.8% gain in Factory Orders released on Wednesday. In addition, data released in the US showed a decline in Initial Jobless Claims to 228,000 after seasonal adjustments, adding to figures that point to a looser labor market.
Friday’s NFP data will be critical and the only game in town until Tuesday. Market consensus is for a 240,000 increase and for the Unemployment rate to stay at 3.6% in March. Expectations of another rate hike from the Federal Reserve (Fed) at the next meeting continue to fall. The employment numbers could be critical for bonds, the US Dollar, and also the equity market.
Price consolidation across the FX board seems likely ahead, considering the Easter holiday. NFP could trigger some volatility, including erratic swings. Impulses in EUR/USD could be short-lived, but a weekly close above 1.1000 could have consequences.
EUR/USD short-term technical outlook
The EUR/USD managed to remain above 1.0880 and climbed to 1.0930, showing that the bullish outlook holds. However, the pair faces strong resistance ahead and the momentum is fading. The daily chart shows the Euro firm above bullish key Simple Moving Averages (SMA) and still looking at 1.1000.
The 4-hour chart shows technical indicators offering no clear clues as the pair stays in a consolidation phase that will likely continue during Asian hours. A slide below 1.0880 should set the stage for an extension of the downward correction, probably to the 1.0840 zone. On the upside, gains above 1.0950 seem unlikely over the next session.
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