“¢ The USD demand picks up the pace and prompts some fresh selling.
“¢ The absent fundamental catalyst might help limit further downside.
“¢ Traders start repositioning for Friday’s US monthly jobs report.
The USD demand picked up some pace since the early North-American session and dragged the EUR/USD pair into the negative territory for the second straight session.
The pair failed to capitalize on its early uptick to levels beyond the 1.1200 round figure mark, rather met with some fresh supply and extended the post-FOMC pullback from near two-week tops.
The intraday slide accelerated further in wake of a modest US Dollar uptick, which now seemed to have found some fresh buying in wake of a goodish pickup in the US Treasury bond yields.
As Yohay Elam, FXStreet’s own Analyst explains, “it seems that the dollar’s retreat has come to an end. The Fed’s refusal to slash rates and higher NFP expectations may extend the greenback comeback.”
Apart from this, the downtick wasn’t backed by any obvious fundamental catalyst and hence, lacked any strong follow-through as investors start repositioning for Friday’s US jobs report, popularly known as NFP.
“Expectations for the US Non-Farm Payrolls have risen following the blockbuster increase of 275K in private sector jobs, as published by ADP on Thursday. The consensus of economists, as shown in the FXStreet calendar, stands at around 180K,” Yohay added further.
Technical outlook
Valeria Bednarik, FXStreet own American Chief Analyst writes, “the pair is at risk of extending its decline, as, in the 4 hours chart, technical indicators keep easing, the Momentum barely holding above its mid-line and the RSI currently challenging the 50 level. The price seesaws around a bullish 20 SMA, while the larger ones gain downward traction above the current levels. The bearish case will be firmer on a break below 1.1190, a Fibonacci support.”
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