Despite further Fed-related dollar strength, the EUR/USD has continued to fall. The pair is already at its lowest level since early April, and it appears to be digging its way to the bottom – however, according to FXStreet’s Analyst Yohay Elam, a small reprieve could come in response to the all-important US jobs report.
“Nonfarm Payrolls are expected to expand by 690,000 jobs in June, up from 559,000 in May. However, there are various reasons to be skeptical about such a result. This could give the greenback a chance to rest.”
“Since mid-June, when the Federal Reserve signalled its willingness to tighten monetary policy by buying fewer bonds, the dollar has been steadily rising. It’s possible that a correction is overdue, and the NFP could be the catalyst.”
“Will a potentially poor employment report alter the dollar’s longer-term trajectory? Most likely not. The Fed is inclined toward issuing less dollars, and the hawkish side is growing in size.”
“Furthermore, the dollar has room to appreciate against the euro, as the European Central Bank appears committed to keeping its monetary policy loose. Concerns regarding the recurrence of coronavirus in Europe, led by the Delta type, may add to the common currency’s challenges.”
“The daily low of 1.1835, which is also the lowest since June, provides some support. It is followed by 1.1820, which is a resistance line that dates back to April. Resistance is at 1.1880, then 1.1910, then 1.1950 and 1.1950, which have all halted EUR/decline USD’s in the last week.”/n
