The EUR/USD currency pair traded slightly lower at around 1.1550 during the European session on Monday, as the US Dollar maintained its early recovery, though analysts noted this rebound lacked conviction due to softer US jobs data [1]. According to Rabobank analysts, Friday’s US Nonfarm Payrolls (NFP) report showed a disappointing headline figure of -23,000 jobs and a 37,000 downward revision to the June estimate, highlighting ongoing downside risks in the US labor market [1]. This weaker employment data has further eroded the case for additional Federal Reserve (Fed) tightening, with Rabobank stating that 'the case for a Fed hike is weakening, but it is certainly not yet done for' [1].
Looking ahead, the US Consumer Price Index (CPI) data for July, scheduled for release on Wednesday, is expected to be a major trigger for the US Dollar’s direction this week [1]. In the Eurozone, the Sentix Investor Confidence index surprised to the upside, rising to 0.9 in August from -3.1 in July, signaling improved investor morale [1].
From a technical perspective, EUR/USD is trading above the 20-day exponential moving average (EMA) at 1.1484 and just above a downward-sloping trend line near 1.1520, maintaining a bullish near-term bias [1]. The Relative Strength Index (14) stands at around 61, indicating constructive upside momentum without being overbought [1]. Immediate support is seen at the trend-line break area near 1.1520, with deeper support at the 20-day EMA, while resistance lies at the August 7 high of 1.1581 and the June 5 high of 1.1644 if the pair continues to advance [1].
CONCLUSION
EUR/USD remains supported above key technical levels as softer US jobs data weakens the case for further Fed rate hikes. Market participants are now focused on upcoming US CPI data, which could provide further direction for the pair. Improved Eurozone investor confidence adds a constructive backdrop for the euro.