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EUR/USD fimer, approaches 1.1100 ahead of NFP

  • EUR/USD adds to Thursday’s gains near the 1.11 handle.
  • Trump announced extra tariffs on US imports from China.
  • US Non-farm Payrolls expected at 169K in July.

The single currency is trading on a positive note once again and is now lifting EUR/USD to the area near the key barrier at 1.1100 the figure.

EUR/USD looks to trade, Payrolls

The pair managed to somewhat reverse the post-FOMC pessimism, rebounding from YTD lows in the boundaries of 1.1120 and retaking the proximity of the 1.1100 mark.

The greenback receded from recent 2019 highs in response to the sharp drop in US 10-year yields after President Trump all of the sudden announced fresh tariffs of 10% on Chinese products worth $300 billion late on Thursday.

While trade jitters have come to the fore as driver of the price action in global assets, investors will also be paying close attention to the publication of the US labour market report, where Payrolls are seen at nearly 170K in July and the unemployment rate should stay unchanged at 3.7%.

What to look for around EUR

The selling mood around EUR is projected to stay for longer than expected following the recent FOMC event and amidst ECB’s preparations for a fresh wave of monetary stimulus, including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. The ECB has already changed its forward guidance and it now expects rates to remain at ‘present or lower levels’ until at least mid-2020. The unremitting deterioration of the economic outlook in the region and the lack of traction in inflation are seen limiting any occasional bullish attempts in EUR for the time being and also give extra sustain to the dovish stance in the ECB.

EUR/USD levels to watch

At the moment, the pair is advancing 0.06% at 1.1090 and a breakout of 1.1101 (low Jul.25) would target 1.1187 (21-day SMA) en route to 1.1229 (55-day SMA). On the flip side, the next support emerges at 1.1026 (2019 low Aug.1) seconded by 1.1021 (high May 8 2017) and finally 1.0839 (monthly low May 11 2017).

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