US Nonfarm Payrolls Forecast: Slowdown in NFP expected after strong beginning of the year
How will US March Nonfarm Payrolls affect EUR/USD?
Increased bets for Fed rate cuts keep the US Dollar undermined against its major counterparts, driving the EUR/USD pair to a weekly high near 1.0875. It remains to be seen if the pair can sustain its upswing in the lead-up to the US NFP showdown.
A strong-than-expected NFP headline figure above the 200,000 expected increase combined with hotter-than-expected wage inflation data could temper June Fed rate cut bets, providing the much-needed lift to the US Dollar while sending EUR/USD back toward 1.0750. Conversely, if the US employment data points to loosening labor market conditions and decelerating trends in pay growth, the Greenback could come under renewed selling pressure amid reinforcement of dovish Fed expectations. In such a case, EUR/USD could advance through the 1.0900 threshold.
Dhwani Mehta, Analyst at FXStreet, offers a brief technical outlook for EUR/USD:
“The EUR/USD pair has recaptured the critical 50-day Simple Moving Average (SMA) at 1.0830 on a daily closing basis on Wednesday. The 14-day Relative Strength Index (RSI) flirts with the 50 level, suggesting that buyers lean in favor of the pair in the near term”.
“Buyers need to take out the 100-day SMA at 1.0876 to extend the recovery toward the 1.0900 level. The next upside barrier for EUR/USD will be then seen at the March 21 high of 1.0943. Conversely, the initial demand area is seen at the 1.0800 round figure, below which the April 3 low at 1.0764 will be tested. The line in the sand for Euro buyers is envisioned at 1.0725, April lows”, Dhwani adds.
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