Brocker.Org: EUR/USD gravitates near 1.0970 after NFP, Fedspeak eyed


The greenback is clinging to its daily gains vs. its peers on Friday, taking EUR/USD to the current 1.0970/80 band following the release of US Non-farm Payrolls.

EUR/USD supported near 1.0950

The pair has reverted the quick drop to daily lows in the mid-1.0900s in response to the upbeat results from the US labour market during April. In fact, the US economy created more than 200K jobs during last month, while the jobless rate dropped further to 4.5%, bettering initial estimates.

The optimistic results were somewhat eclipsed by the absence of traction in wage inflation, as Average Hourly Earnings rose 0.3% inter-month and 2.5% on a yearly basis, below March’s 2.7% gain.

All in all, the US labour market stays strong, which could in turn give extra oxygen to expectations of a rate hike by the Federal Reserve at the June meeting. Currently, the probability of such scenario is at just above 83% according to CME Group’s FedWatch tool, based on Fed Funds futures prices.

Later in the session, Chairwoman J.Yellen and Vice Chair S.Fischer are due to speak along with San Francisco Fed J.Williams (2018 voter, hawkish) and Boston Fed E.Rosegren (2019 voter, hawkish).

EUR/USD levels to watch

At the moment, the pair is retreating 0.07% at 1.0975 and a break above 1.0990 (2017 high May 5) would target 1.1000 (psychological handle) en route to 1.1300 (high Nov.9 2016). On the flip side, the immediate support aligns at 1.0890 (23.6% Fibo of the April-May rally) followed by 1.0833 (200-day sma) and finally 1.0819 (low Apr.24).