February 03, 2023 10:27 GMT
EUR/USD Staging Shallow Post-ECB Bounce
- The EUR is on the front foot early Friday as markets recover their ECB-induced losses posted into the Thursday close. EUR/USD has bounced off the overnight low at 1.0882 to trade either side of the 1.09 handle. The pullback in the pair is deemed corrective from a technical perspective, with the broad trend direction remains up for now - resistance at 1.0929, the Jan 26 high, has been cleared. This maintains the bullish price sequence of higher highs and higher lows and clears the way for a climb towards 1.1054, a Fibonacci projection.
- High beta and growth proxy currencies are slightly lower to start the final session of the week, as equities maintain a modest risk-off tone after poorly received earnings from megacap firms Apple, Amazon and Alphabet after-market Thursday. As a result, AUD and CAD make up the worst performers among G10 FX.
- The January payrolls report is the highlight on the Friday calendar, with markets expecting 189k jobs added over the month of January - although the unemployment rate is seen ticking higher by 0.1ppts to 3.6%. Average hourly earnings will also be noted to gauge the scale or viability of any potential Fed easing into year-end.
- The ISM services index follows, with markets expecting the data to show a return to growth at 50.5.