- The US dollar weakens across the board after the US official jobs report.
- EUR/USD gains momentum after breaking above 1.0930.
- The pair is heading for its highest weekly close since May.
The EUR/USD pair gained momentum amid a weaker US Dollar following the release of US employment data. After breaking above 1.0930, the Euro accelerated and climbed to the 1.0960 area, reaching the highest level in a week.
US Dollar down after NFP
Nonfarm Payrolls (NFP) in the US rose by 209,000 in June, below the market expectation of 225,000. May’s increase of 339,000 was revised lower to 306,000. The unemployment rate edged lower to 3.6%. Despite the miss in job creation, the numbers continue to show a strong labor market.
Market continues to see a rate hike at the next FOMC meeting but expectations of a second hike before year-end have eased. Such repricing has kept US yields limited and, as a result, the US Dollar is falling by 0.75%, having the worst day in a week. US stocks are trading mixed, while commodity prices are up.
The EUR/USD is hovering above 1.0960, at the highest since June 27, with bullish momentum intact. It is holding onto weekly gains, above the 20-week Simple Moving Average. If the pair holds above 1.0960, attention would turn to the 1.1000 area and then the June high at 1.1012. On the contrary, a decline under 1.0930 would weaken the short-term outlook for the Euro.
No key reports are due from the Eurozone next week. The most relevant economic numbers will come from the US with the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday. Inflation figures will be crucial ahead of the July 25-26 FOMC meeting.