Euro is looking for direction with all eyes on US Nonfarm Payrolls data
- EUR/USD consolidates around 1.1540 after bouncing up from 1.1510 lows.
- US Nonfarm Payrolls is expected to show a moderate increase in employment in March.
- Technical indicators show a mild bearish pressure.
The Euro (EUR) is trading sideways between 1.1530 and 1.1550 against the US Dollar (USD) in a holiday-thinned session, with most markets closed on Good Friday. The pair is on track for a 0.3% weekly appreciation, yet with price action trapped halfway through March’s trading range.
Mild risk aversion is keeping Euro rallies in check as the Iran war enters its 35th day, while markets shift their focus, at least temporarily, to the US Nonfarm Payrolls report, due later on Friday. The US economy is expected to have created 60K new jobs in March, to partially offset February’s 92K decline, with the Unemployment Rate steady at 4.4%
Technical Analysis: EUR/USD shows a neutral to bearish tone
EUR/USD's near-term bias is neutral with a slight downside tilt following rejection at a previous support trendline earlier this week. The Moving Average Convergence Divergence (MACD) line has slipped back below the signal line, highlighting incipient bearish momentum, while the Relative Strength Index (RSI) flatlines around the 50 level, suggesting a lack of clear bias.
Immediate support lies at Thursday's low around the 1.1510 area, so far holding bears from a deeper reversal to March 30 low at 1.1443 and the March 13 low at 1.1422.
On the topside, initial resistance stands at the intraday level of 1.1563. Further up, the confluence of the mentioned broken trendline now at 1.1645 with the resistance area between 1.1620 and 1.1640, which has capped bulls several times in late March and early April, is likely to pose a significant challenge for bulls.
(The technical analysis of this story was written with the help of an AI tool.)
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.