EUR/USD Price Forecast: Weak US NFPs and Wage Growth Could Deliver $1.03

For the EUR, it’s a busy morning on the Eurozone economic calendar.

Ahead of the European open, industrial production figures for Germany drew market interest.

German industrial production unexpectedly rose by 0.4% in June, reversing a 0.1% decline in May. Economists forecast a 0.3% decline.

According to Destatis,

• In June, production in industry excluding energy and construction was up 0.7%.
• Within industry, the production of capital goods rose by 1.0%, with the production of consumer goods rising by 1.1%. The production of intermediate goods saw a modest 0.3% rise.
• Outside industry, energy production was flat relative to the previous month, while production in construction was down 0.8%.

According to the June report,

• Extreme shortages of intermediate products impacted production.
• Supply chain disruption stemming from the Ukraine war and COVID-19 also persisted.
• A reported 74.1% of those surveyed complained of bottlenecks and procurement issues for intermediate products and raw materials.

Going into the European open, French and Italian industrial production figures will also influence.

EUR/USD Price Action

At the time of writing, the EUR was down 0.21% to $1.02237.

In a mixed start, the EUR rise to an early high of $1.02520 before falling to a low of $1.02225.

Technical Indicators

The EUR/USD needs to avoid the $1.0218 pivot to target the First Major Resistance Level (R1) at $1.0281.

The appetite for riskier assets will need to pick up to support a breakout from the Thursday high of $1.02539.

An extended rally would likely see the EUR/USD pair test resistance at $1.030 and the Second Major Resistance Level (R2) at $1.0317.

The Third Major Resistance Level (R3) sits at $1.0417.

A fall through the pivot would bring the First Major Support Level (S1) at $1.0182 into play.

An extended sell-off throughout the day could see the EUR/USD test the second Major Support Level (S2) at $1.0118 and support at $1.010.

The Third Major Support Level sits at $1.0019.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.

At the time of writing, the EUR sat above the 100-day EMA, currently at $1.02072.

The 50-day EMA closed in on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, which were positive price signals.

A move through the 200-day EMA, currently at $1.02721 and R1 ($1.0281), would support a run at $1.030 and R2.

However, a pullback through the 100-day EMA would leave the 50-day EMA, currently at $1.02008, and support levels in play.

The US Session

It is a big day ahead for the Dollar, with US nonfarm payrolls and wage growth in focus. Following the upbeat service sector PMI numbers on Wednesday, solid labor market stats would support a 75-basis point rate hike in September. While the headline number will be the key, expect wage growth numbers to influence.

Post-release, FOMC member chatter will also need monitoring, with any hawkish policy talk to pressure the EUR/USD pair.