EUR/USD Climbs Above 1.20 in a Strong Push to the Upside

2 min read
06 May, 21
Written by Clover4X



Article Highlights:
  • The euro climbs above 1.20 against the US dollar
  • Traders eye Friday’s nonfarm payroll and unemployment data

EUR/USD Climbs Above 1.20

The EUR/USD pair is on track to snap a losing streak of two consecutive days of losses on Thursday. EUR/USD buyers managed to lift the rate above 1.20 in the early trading hours of Thursday’s session. The levels below the milestone were where the exchange rate gyrated for the past two days.

On Wednesday, the EUR/USD slipped to a low of 1.1985 and closed the session at 1.2003. Currently, the pair is trading at 1.2039, while bulls seem to be in control of the intraday move. Meanwhile the rate is now in positive territory with a session high of 1.2044.

So far in May, the EUR/USD has been trading relatively flat, moving slightly to the upside from the opening price of 1.2030 to the current market price of 1.2039. However, in April, the exchange rate was in a continued move to the upside that ended on the very last trading day of April. Back then the pair slipped over 0.8%. For April, the EUR/USD advanced 2.45%.

Late on Wednesday, the pair dropped to its lowest level in more than two weeks as market participants are seeking direction amid market turbulences, namely inflation concerns, confusion over higher interest rates, and expected higher corporate taxes.

An Interest Rate Rise on the Horizon?

Treasury Secretary Janet Yellen this week diverged from the Fed’s position toward the economy when she mentioned in an interview that the US may need to raise rates to prevent the economy from overheating and keep inflation under control. The Federal Reserve, however, has reiterated multiple times that the central bank sees no inflationary problem in the foreseeable future.

Yesterday, the ADP nonfarm payrolls, announced by the Research Institute, showed that employment in the US private sector increased by 742,000 in April, lower than the consensus of 800,000. The news helped keep the pressure over the EUR/USD pair.

More importantly, however, traders and investors will be on the lookout for Friday’s highly-anticipated nonfarm payrolls that will reveal how many people found jobs for April. In the previous month, the US labor market grew by 916,000 new jobs. In addition, the US Department of Labor will also announce the change in the unemployment rate. Last month, the unemployment rate declined to 6.0%.

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