EUR/USD Climbs Back Above 1.0200 As The NFP Dust Settles
Alex Boltyan | Aug 08, 2022 10:50AM ET
The EUR/USD pair trades a tad higher on Monday while the markets keep digesting last week's Nonfarm payrolls data from the U.S. At the time of writing, the EUR/USD is trading at 1.0208, 0.26% above its opening price, after bottoming at 1.0159 during the European session.
The last U.S. employment reports showed that nearly a million jobs were created in the previous two months, driving the unemployment rate to a new cycle low of 3.5%. More importantly, wages also continued to grow.
In that sense, market participants lifted the odds of a 75 bps hike in the September meeting to 66.5% as they assume that a strong labor market will give the FOMC more room to be aggressive to achieve its goal of cooling down inflation. These prospects could limit EUR/USD's upside.
Across the pond, minor data was released in the EU and had a limited impact on the euro. The August Sentix Investor Confidence was worse than anticipated, printing at -25.2 vs. the -24.7 consensus. The U.S. calendar will remain empty ahead of Wednesday's July CPI figures, so risk impulses will likely set the pace of the market for the rest of the day.
According to the daily chart, the short-term technical outlook for the EUR/USD remains neutral, slightly skewed to the downside as the bulls fail to make decisive upwards movements. The RSI gained a modest positive slope and stood below its midline, while the MACD kept printing lower green bars, indicating decreasing buying interest.
On the upside, the following resistance levels are seen at the 1.0250 zone, followed by last Tuesday's peak of 1.0294 and then the 1.0350 area. On the other hand, a steeper decline can be expected if the pair loses the 20-day SMA, currently at 1.0169, which will pave the way to retest the 1.0100 level and then the 1.0000 mark.
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