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  • Bulls take a breather as European equities pare back gains.
  • Manages to hold above 1.1700 as the focus shifts to the US NFP data.

The EUR/USD pair failed to sustain at higher levels, now easing back towards the 1.17 handle, as the risk-on rally in the European equities stalled on the back of China’s retaliation to the US tariffs.

With the US-China trade war officially underway, markets turn jittery after the initial positive reaction, as they evaluate the impact of the tariffs war on the global economic outlook. This explains the consolidative mode seen in the US dollar across its main competitors, which keeps the upside capped in the spot.

Also, increased cautiousness ahead of the US payrolls data also keeps a lid on EUR/USD’s rebound. An upbeat US jobs report could offer the much-needed respite to the USD bulls, triggering a sell-off in the pair.

“The US economy is expected to  have added 195K new jobs in June, the unemployment rate is seen at record lows of 3.8%, while as usual, wages are barely expected to show signs of life, up monthly basis 0.3% and by 2.8% YoY,” FXStreet’s Chief Analyst, Valeria Bednarik noted.

EUR/USD Technical Levels

According to Nenad Kerkez, Head of Technical Analysis and Trading at  Elite CurrenSea, “The  EUR/USD  is showing higher highs and higher lows that indicates a bullish zigzag. The MACD is also positive, meaning we have a confluence of price and technical indicator. However, today is  NFP  with the Unemployment rate and Average Hourly Earnings data. This single event might be volatile as always, so we need to focus on breakouts. Above 1.1735 targets are 1762 and 1788 with a potential for 1.1820. However, a drop below 1.1670 should target 1.1653 and 1.1620 with a potential for 1.1575. The price action and direction is a very data dependent.”