The EUR/USD currency pair is currently experiencing a period of consolidation just below the 1.0900 level, following a positive trend that lasted four consecutive days. Market participants are closely monitoring the upcoming U.S. employment data, which is anticipated to shed light on the labor market’s health and impact the currency’s movements.
Recent U.S. economic indicators have influenced the EUR/USD pair, particularly the mixed results reported on Thursday. The initial jobless claims fell by 12,000 to reach 216,000 for the week ending on October 26. Meanwhile, the Employment Cost Index reported a rise of 0.8% in the third quarter, which was beneath the forecasted 0.9% increase. This combination of data has exerted downward pressure on the U.S. dollar, bolstering the EURO ’s position against it.
Looking ahead, U.S. Nonfarm Payrolls (NFP), set to be released soon, are predicted to increase by 113,000 in October compared to September’s robust gain of 254,000. Should the NFP figure surprise on the downside, notably falling below 100,000, it could trigger further declines for the dollar, allowing the EUR/USD pair to rise. Conversely, a stronger-than-expected print, such as 150,000 or more, may reinvigorate the dollar, posing challenges for the EURO in sustaining its gains as the weekend approaches.
Additionally, upcoming political events, including the U.S. presidential election and a Federal Reserve meeting, are likely to prompt market participants to reassess their positions, potentially leading to volatility in currency trading.
From a technical standpoint, the EUR/USD is hovering around the critical pivot point of 1.0870, coinciding with both 200-day and 20-day simple moving averages. If this level is confirmed as support, buyers might show increased interest, targeting resistance at 1.0900 before looking towards further levels at 1.0940 and 1.1000. However, a failure to maintain above 1.0870 could lead the pair to retrace toward lower support levels at 1.0800 and 1.0750.
