The EUR/USD currency pair is exhibiting limited movement at the start of the week, hovering above the 1.1300 level amid cautious market sentiment. Investors are adopting a risk-averse approach as they anticipate crucial economic data, specifically the ISM Services PMI report for April.
On the previous Friday, the EUR/USD experienced a minor uptick following the release of the U.S. employment report. According to the Bureau of Labor Statistics, Nonfarm Payrolls increased by 177,000 in April, surpassing the consensus estimate of 130,000. However, this positive news was slightly marred by downward revisions of 43,000 and 15,000 for the February and March figures, respectively. The unemployment rate remained steady at 4.2%, aligning with projections.
Market participants are now focused on the upcoming ISM Services PMI report. Should the PMI fall below 50, indicating a contraction in the service sector, it could negatively impact the U.S. dollar and potentially allow the EUR/USD to gain ground. However, many traders are likely to hold off on making significant moves until after the Federal Reserve’s monetary policy decision is announced on Wednesday.
In the broader market, U.S. stock index futures are currently down by 0.6% to 0.7%, indicative of a risk-averse environment. The U.S. dollar has struggled to attract safe-haven interest in recent sessions, and a downturn in Wall Street could further pressure the dollar, offering support to the EUR/USD pair.
From a technical perspective, the Relative Strength Index (RSI) on the 4-hour chart is hovering just below the neutral 50 level, indicating a lack of clear momentum for the EUR/USD . Resistance levels may be encountered at 1.1380, bolstered by the 100-period Simple Moving Average and Fibonacci retracements, with additional resistance at 1.1430 and the psychological level of 1.1500. Conversely, key support levels are projected at 1.1270, 1.1175, and 1.1080, corresponding to various Fibonacci retracement levels.
