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  • EUR/USD consolidates Friday’s reversal from below 1.1800 levels.
  • US dollar steadies in the aftermath of NFP jobs report.
  • The spot awaits the German data, with all eyes on ECB decision.

EUR/USD is looking to extend its overnight range play below mid-1.1800 into early Europe, as investors remain cautious starting out a fresh week. The main event risk this week is likely to be the European Central Bank (ECB) monetary policy decision.

The main currency pair takes cues from the listless trading seen in the US dollar against its major peers, in the aftermath of the upbeat US labor market report and amid holiday-thinned light trading. US markets are closed today in observance of Labor Day.

On Friday, the headline Non-farm payrolls data for August missed expectations with +1371K. However, the unemployment rate fell to 8.4% vs. 9.8% expected. Meanwhile, the Average Hourly Earnings surpassed expectations, with +0.4% MoM in August vs. 0% expected.

The greenback rallied hard on the upbeat US jobless rate and wage growth data but the sellers soon returned amid concerns over the fiscal stand-off and knocked-off the US currency, which prompted a sharp recovery in the EUR/USD pair to 1.1855 highs.

However, the EUR bulls failed to sustain at higher levels, the ECB’s concerns over the exchange rate level continue to weigh on the common currency. The focus now turns towards the ECB policy meeting due later this Thursday, as the bloc battles deflation amid the euro appreciation.

In the day ahead, the German Industrial Production data and Eurozone Sentix Investor Confidence will offer fresh incentives, as the risk flows and US dollar price action will continue to influence the pair.

EUR/USD Technical levels

“A move above Friday’s high of 1.1865 is needed to confirm an end of a pullback from the recent high of 1.2011 and put the bulls back into the driver’s seat. Alternatively, a break under trendline rising from May 14 and July 1 highs would imply a bullish-to-bearish trend change. At press time, the trendline support is located at 1.1765,” FXStreet’s Analyst Omkar Godbole explains.

EUR/USD Additional levels

 

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