EUR/USD Daily Forecast – Euro Stabilizes Near the 1.08 Level Ahead of NFP Data

EUR/USD found a bottom on Thursday and posted its first day with a gain this week. The price action opens up the potential for more upside although today’s US jobs report will likely be the main driver.

Analysts expect that the Non-Farm employment data will show a loss of 22 million jobs in the US last month which is roughly in line with what the weekly jobless claims data has been signaling.

The ADP report released earlier in the week showed just over 20 million jobs lost last month.

The markets have been anticipating a decline in the employment of this magnitude for some time now and the reaction will likely depend on how far the figures deviate from the analyst estimate.

Ahead of the US jobs report, European Central Bank President Lagarde is scheduled to speak. The euro came under pressure earlier this week after a top court in Germany ruled that the ECB needs to justify that the size of its asset purchase program is warranted. In this context, her speech may trigger some volatility in the euro pairs if quantitative easing is discussed.

Technical Analysis

EUR/USD briefly traded at its lowest level since April 24 yesterday before bouncing higher to erase losses from Wednesday.

The price action is a mild show of strength and might be hinting that a bottom for the week is in. A stronger than expected jobs report out of the US could alter this outlook.

EUR/USD was last seen trading near a horizontal level at 1.0833 which has acted as both support and resistance over the last month or so. A sustained move above the level opens up the path for a test of resistance at 1.0907.

On the other hand, a failure to hold at current levels could lead to a decline back towards support at 1.0775. This level is critical to the downside as it served to hold the pair higher in February and then again twice in April, on a daily close basis.

Bottom Line

• EUR/USD has gotten a lift higher after briefly trading at lows not seen since late April.
• The US jobs report scheduled for release later today stands to have an impact on the pair if there is a significant deviation from the analyst estimate.