EUR/USD Rallies Above 0.9900 After U.S. Jobs Report
2022.11.07 03:26
The advanced on Friday despite mixed Eurozone PMIs data and extended gains after the release of October’s U.S. nonfarm payrolls report. The EUR/USD pair reached a two-day high of 0.9940 as the greenback slumped across the board despite better-than-expected U.S. jobs data. At the time of writing, the EUR/USD is trading at 0.9923, posting a 1.8% daily gain, although still headed to a 0.4% weekly decline.
The U.S. report showed 261,000 new jobs were created in October, above the consensus of 200,000, while the September reading was upwardly revised to 315,000. The rate, measured by the average hourly earnings, came at 0.4% in October and eased to 4.7% in the . Finally, the rose to 3.7% from 3.5% the previous month and above the consensus of 3.6%, overshadowing to some degree strong job creation.
Although the strong payrolls keep supporting the case for the continuation of the tightening cycle by the Federal Reserve, the greenback came under pressure, while Treasury yields moved higher. Earlier in the day, data showed the Eurozone activity continued to contract in October at the sharpest rate in almost two years.
The S&P Global Eurozone dropped to a 23-month low of 47.3 but came slightly above the consensus of 47.1. In addition, the German showed another contraction amid soaring , higher interest rates, and uncertainty in the area. The German S&P Global came in at 46.5, above the expectations of 44.9 and slightly improving from the last reading of 44.9.
According to the weekly chart, the EUR/USD pair holds a bearish outlook and will close this week lower after two consecutive gains. On the daily chart, however, the perspective has turned slightly positive following Friday’s bounce, with the price moving above both the 20-day SMA and the northbound of the descending channel drawn from February highs.
A daily close above 0.9900 could favor a re-test of parity and a move towards October’s high of 1.0080. On the other hand, short-term support levels are seen at the 20-day SMA at the 0.9839 zone and the 0.9800 area, ahead of weekly lows at the 0.9730 zone.
