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EURUSD Holds Firm Despite Stellar US Employment Data

  • An above consensus US NFP print of +467k jobs, accompanied by impressive upward revisions to prior month’s figures, was initially supportive for the US Dollar, recouping losses as US treasury yields spiked following the data.
  • Despite the initial USD relief rally, the gains were slowly eroded throughout the session with a bounce in global equity indices also hampering the greenback’s progress. As of writing, the US dollar index is up 0.04%, however, if the index were to slip into negative territory this would represent five consecutive declining sessions.
  • The dollar’s most apparent weakness is shown by EURUSD that although marginally lower from the NFP release, remains 0.1% higher for Friday after a morning breach of the 2022 highs to 1.1484. Cluster resistance is seen between 1.1484-1.1495 and the single currency’s resilience on Friday may signal the strong potential for further short-term gains.
  • With EUR crosses well supported, the relative dollar strength was seen most notably against AUD and NZD both retreating over 0.75%. Both GBP (-0.44%) and CHF (-0.59%) also came under pressure with USDJPY consolidating above the 115.00 mark, up 0.25% for the session.
  • Elsewhere, the Canadian dollar also struggled following a much poorer set of employment figures. Despite consolidating, the USDCAD outlook remains bullish. The recent break of the 50-day EMA has opened 1.2843, as a Fibonacci retracement target. First support is at 1.2650, the Jan 27 low.
  • With China returning next week, Monday’s calendar looks fairly light for major data. Of note, ECB President Lagarde is due to testify at a virtual hearing before the European Parliament Economic and Monetary Affairs Committee.
  • US CPI will headline the week’s data docket, scheduled for release on Thursday.

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