Yahoo Finance EUR/USD Daily Forecast – Euro Eases From 13-Week Highs Ahead of US Jobs Report
EUR/USD has nearly wiped out the 7.5% decline from the high in March but is seen easing lower ahead of today’s US Non-Farm employment report.
The pair regained upward momentum after yesterday’s ECB meeting and hit a high of 1.1383 in early trading today. The pair has gained just over 4% from last week’s low and has posted nine consecutive daily gains.
The European Central Bank announced an increase in their pandemic emergency purchase program (PEPP) yesterday by 600 billion euros, bringing the total size to 1.35 trillion.
Updated forecasts showed that GDP growth is expected to contract 8.7 this year before rebounding next year. Inflation is expected to rise 0.3% this year and 0.8% next year.
Earlier this week, European unemployment was reported at 7.3%, well below the analyst estimate for a rise to 8.2%.
The markets will shift their focus to the US as the latest NFP jobs report is scheduled for release later in the day. Analysts expect it will show a loss of 7.75 million jobs and a rise in the unemployment rate to 19.4%.
While the analyst estimates have been slightly adjusted in a positive manner from earlier in the week, there remains a divergence from earlier data.
The ADP report released on Wednesday showed 2.76 million jobs lost versus an expected 9 million. The ADP report tends to have a strong correlation to the Bureau of Labor Statistics’ NFP report, which suggests the odds are tilted in favor of the figures coming in ahead of expectations today.
Technical Analysis
EUR/USD is easing lower after running into some resistance ahead of the 1.1400 level.
The level of interest to the downside falls at 1.1290 which marks the highest weekly close in March. To the upside, resistance is seen at 1.1376. A break of it targets the March high of 1.1496.
US economic reports have not triggered much volatility as of late and if the immediate reaction from the report doesn’t move the exchange rate much, the pair may fall into a consolidation.
EUR/USD has entered overbought conditions on the 4-hour and daily charts which typically leads to sideways movement after a sharp move.
Bottom Line
EUR/USD is up more than 4% since last week’s low.
Jobs data from the US will be released later in the day, the earlier ADP report hints of a stronger than expected reading.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
