EUR/USD Bulls to Retarget $1.11 on a Weak US Jobs Report

It is a busy day ahead for the EUR/USD. This morning, German factory orders will draw interest before French industrial production, German construction PMI, and euro area retail sales figures.

We expect the German factory orders and euro area retail sales figures to garner the most interest. Weak numbers would test the appetite for the EUR/USD following the ECB Press Conference on Thursday.

While the economic indicators will draw interest, investors should monitor ECB member commentary. ECB Executive Board member Frank Elderson is on the calendar to speak today. However, investors should track ECB member chatter with the media.

EUR/USD Price Action

This morning, the EUR/USD was up 0.32% to $1.10443. A mixed start to the day saw the EUR/USD fall to an early low of $1.10067 before rising to a high of $1.10443.

Technical Indicators

Resistance & Support Levels

The EUR/USD needs to hold above the $1.1029 pivot to target the First Major Resistance Level (R1) at $1.1072 and the Thursday high of $1.10916. A return to $1.1050 would signal a bullish session. However, the EUR/USD needs euro area economic indicators and the US Jobs Report to support a breakout session.

In the case of an extended rally, the bulls will likely test the Second Major Resistance Level (R2) at $1.1135. The Third Major Resistance Level (R3) sits at $1.1240.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0967 into play. However, barring a US Jobs Report-fueled sell-off, the EUR/USD pair should avoid sub-$1.0950 and the Second Major Support Level (S2) at $1.0923. The Third Major Support Level (S3) sits at $1.0818.

Looking at the EMAs and the 4-hourly chart, the EMAs sent bullish signals. The EUR/USD sits above the 50-day EMA ($1.10142). The 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($1.10142) would support a breakout from R1 ($1.1072) to give the bulls a run at R2 ($1.1135). However, a fall through the 50-day EMA ($1.10142) would bring the 100-day EMA ($1.09883) and S1 ($1.0967) into view. A fall through the 50-day EMA would send a bearish signal.

The US Session

Looking ahead to the US session, it is a busy day on the US economic calendar. The US Jobs Report will be the main report of the day.

A pickup in wage growth and a jump in nonfarm payrolls would fuel bets on a June interest rate hike. However, a weak nonfarm payroll figure would weigh, with recessionary jitters gripping the markets.

Beyond the economic calendar, the banking sector, the US debt ceiling, and corporate earnings need consideration.