The EUR/USD pair saw a rebound on Friday after poor US Nonfarm Payroll (NFP) data led to a decline in the value of the Greenback. This drop in the US Dollar was a result of concerns about a potential economic slowdown in the United States. The market reacted strongly to the disappointing NFP figures, causing the USD to lose ground across various markets.
Looking ahead to the coming week, investors will be keeping a close eye on key economic data releases and bets on potential rate cuts. The US NFP report for July fell short of expectations, with only 114K new jobs added compared to the anticipated 175K. Additionally, previous figures were revised downwards, contributing to fears of a weakening labor market. The unemployment rate rose to 4.3%, the highest level since November 2021, and underemployment also increased.
Average hourly earnings growth slowed down, further indicating potential economic challenges. This data, combined with the broader negative sentiment surrounding the US economy, led to a sell-off in risk assets and a decline in equity indexes. As a result, traders are now pricing in a rate cut by the Federal Reserve in September, with a possibility of a double-cut.
Looking at the technical outlook for EUR/USD, the pair managed to break out of a descending channel on Friday. However, it still faces resistance around the 1.0950 level and could potentially test the 200-day Exponential Moving Average (EMA) at 1.0802. If buyers can sustain momentum, the pair may see further gains, while sellers will aim to push the price back towards the last swing low.
In addition to the US NFP report, the article provides valuable insights into the Euro and the European Central Bank (ECB). The Euro is the currency for 20 European Union countries and is the second most traded currency globally. The ECB plays a crucial role in managing monetary policy and maintaining price stability within the Eurozone. Economic indicators such as inflation data, GDP, and trade balance figures impact the value of the Euro.
Overall, the article highlights the significance of the NFP report, its impact on the forex market, and the broader implications for the global economy. It provides readers with a comprehensive overview of the recent market developments and sets the stage for upcoming data releases and events that could influence currency movements.
