EUR/USD Surged Amidst Weak US Jobs Market Data

Highlights

• Euro rises against US dollar due to weak US jobs market
• Federal Reserve tightening cycle may be ending due to job market concerns
• Eurozone economy showing signs of growth with potential for ECB interest rate hikes

Overview

The Euro has been climbing lately against the U.S. Dollar with the single-currency hitting its highest level since February on Tuesday.

On Tuesday, the EUR/USD settled at 1.0956, up ).0053 or +0.49%. The Invesco CurrencyShares Euro Trust ETF (FXE) finished at $101.11, up $0.47 or +0.47%.

Euro Rises, Dollar Sinks as U.S. Job Openings Drop to Lowest Level in Nearly Two Years

The drop in U.S. job openings (JOLTS) to the lowest level in almost two years has reinforced the belief among investors that the Federal Reserve is on the verge of ending its tightening cycle, which helped support the EUR/USD.

While other central banks are raising interest rates to combat inflation, economists are concerned about the possible consequences of a sharp weakening in the labor market as a result of the Fed’s aggressive rate hikes to combat inflation.

However, the Eurozone’s economy is still showing signs of growth, and the European Central Bank (ECB) is expected to raise interest rates further in the coming months.

Experts predict that the EUR/USD pair will continue to rise, with a projected value of $1.15 in the second half of the year.

Nonetheless, there are still uncertainties in the market, such as the recent increase in oil prices and concerns about economic growth that could impact the direction of monetary policy and potentially undo the gains made by the EUR/USD.

Daily EUR/USD Technical Analysis

The main trend is up according to the daily swing chart. Taking out the next main top at 1.1033 will reaffirm the uptrend. A trade through 1.0517 will change the main trend to down.

The minor trend is also up. A trade through 1.0788 will change the minor trend to down. This will also shift the momentum.

The long-term range is 1.2349 to .9537. The EUR/USD is currently testing its 50% level at 1.0943.

Daily EUR/USD Technical Forecast

Trader reaction to the 50% level at 1.0943 is likely to set the early tone on Wednesday.

Bullish Scenario

A sustained move over 1.0943 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the next main top at 1.1033. This is a potential trigger point for an acceleration into the March 31, 2022 main top at 1.1185.

Bearish Scenario

A sustained move under 1.0943 will signal the presence of sellers. This could fuel a near-term move into the minor bottom at 1.0788, followed by a retracement zone at 1.0745 – 1.0691. However, the odds of the market reaching this area on Wednesday are slim unless something unexpected occurs.