The EUR/USD pair opened the NFP week with a bullish gap of 35-pips and extended the rebound from six-month lows of 1.1646 well above the 1.1700 price range. However the market saw very low activity during Asian market hours as trading session opened for the week on account of US Memorial Day Holiday. Geopolitical fears returned last week, and the greenback once again had an upbeat performance against its European rivals however lost ground against safe-haven rivals. The EUR/USD pair has accumulated roughly 800 pips’ decline since topping around 1.2410 mid-April. The common currency had its fair share of own trouble, with political jitters in Italy and Spain, and data indicating that the pace of growth continued decelerating into Q2. US Treasury yields continued easing, with the yield on the benchmark 10-year Treasury note, down roughly 10 basis points from the multi-year high achieved this month, now at 2.93%.
EURUSD Buoyant
The Rebound during today’s trading session in favor of Euro comes on the back of weekend’s news that the attempts at forming a coalition between the Five Star Movement and League have failed after Sergio Mattarella, the Italian President, vetoed the choice of economy minister, who was seen as anti-Euro. The rebound in the Euro triggered fresh US dollar selling across the board, despite the news that North Korea’s leader Kim pushed to kick-start the talks with the US.
While the macroeconomic calendar remains light for the day, the rest of week has a busy schedule with fresh inflation figures for Germany and the EU, and the US Nonfarm Payroll report next Friday, among others. These numbers will give fresh clues on the imbalances between the two economies and their central banks’ policies. Technically, the pair is down for a sixth consecutive week, and despite extremely oversold, there are no signs of a trend-change just yet. On favorable jobs data from the US, 1.1550 will be a key level in a continuation of the downside. Expected support and resistance for the pair are at 1.1620 / 1.1590 / 1.1580 and 1.1732 / 1.1747 / 1.1755 respectively.