EUR/USD's Slide Found Support Again Around 1.1840

EUR/USD Current Price: 1.1846

• US dollar resumes the upside after brief correction ahead of NFP.
• Market participants await key US data, critical for Fed policy expectations.
• EUR/USD’s slide found support again around 1.1840.

The recovery of the EUR/USD was short-lived. After reaching the 1.1880 area, it turned to the downside, falling toward the weekly low near 1.1835 as the US dollar strengthened across the board. After a brief correction, the dollar resumed the uptrend, rising more sharply against other G10 rivals, even amid risk appetite and steady yields.
Economic data from the Eurozone came in above expectations with the headline PMI at 63.4, up from the preliminary reading of 63.1. On Friday, the Producer Price Index for May is due in the Eurozone (consensus: +9.5 y/y). The stance of the European Central Bank for an accommodative policy to support the recovery could be challenged if inflation accelerates.
The key report on Friday will be the Non-Farm Payroll. On Thursday, initial jobless claims dropped to fresh pandemic lows, and manufacturing data showed the recovery continues, with mounting price pressures. Market consensus points to net job creation of near 700K.

EUR/USD short-term technical outlook

The EUR/USD holds a firm bearish tone. The rebound was capped slightly below the 20-SMA in the 4-hour chart. A break under 1.1835 would weaken the pair further, exposing 1.1800. Low volatility is expected ahead of Friday’s Asian session and of the NFP. Still, a new leg higher of the US dollar could trigger sharp moves, and the pair could drop under 1.1800. On the upside, a recovery above 1.1890 would strengthen the outlook for the euro.

Support levels: 1.1835 1.1795 1.1760

Resistance levels: 1.1880 1.1915 1.1945

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