At th start of the week, the EURUSD rebounded to about 1.0800.
The EURUSD dropped substantially on Friday, marking the sixth straight day in the red. The pair returned to the 1.0800 level early Monday, helped by an improved risk attitude. However, with the US stock and bond markets closed in honor of the Labor Day weekend EURUSD may struggle to gain directional momentum.
The August employment report from the United States heightened market volatility ahead of the weekend. Although the US Dollar first fell versus its major rivals. It then produced an astonishing rally. later in the American session, forcing the EURUSD to remain on the defensive.
Nonfarm payrolls in the United States climbed by 187,000 in August. Above experts’ expectations of 170,000. The survey also indicated that the unemployment rate increased to 3.8% from 3.5%. While the labor force participation rate increased to 62.8% from 62.6%. These data supported looser labor market conditions while supporting the notion of a’soft landing.’
Nonetheless, the chance of the Federal Reserve boosting its policy rate by another 25 basis points (bps). Following August employment statistics remains around 30%, according to the CME Group FedWatch Tool. As a result, the unexpected USD strength witnessed late Friday might be the result of profit taking ahead of the long weekend. Early Monday, the favorable shift in market mood prevents the USD from building on Friday’s gains, allowing EURUSD to inch higher. The Euro Stoxx 50 Index was up 0.9% on the day at the time of publication. Meanwhile, Eurozone statistics indicated that Sentix Investor Confidence fell to -21.5 in September from -18.9 in August. This data did not cause a noteworthy market reaction.
EURUSD Technical Analysis
The EURUSD currency pair was last spotted trading at 1.0800 (psychological level). If the pair stabilizes above that level, it might find resistance around 1.0840, where the four-hour chart’s 20-period and 50-period Simple Moving Averages (SMA) connect, ahead of 1.0870 (100-period SMA).
On the negative side, the first support is positioned. prior to 1.0740 (static level from February) and 1.0700 (psychological level9, static level).
