EUR/USD Lower Ahead of Friday Payroll and Unemployment Data

2 min read
04 Feb, 21
Written by Clover4X
Article Highlights:
  • EUR/USD loses ground, slips below 1.20
  • Key US data on Friday anticipated by traders
  • US dollar climbs against competitors

EUR/USD Lower Ahead of Friday

The EUR/USD pair is trading lower on Thursday as market participants eye the latest economic data from the US. Broad US dollar strength has taken the pair to a low under the 1.20 mark. This comes as Europe is raising concerns over its response to the Covid-19 pandemic. The selling pressure over the EUR/USD is defining a fourth straight day of losses. Early in January, the Euro reached a high against the US dollar at 1.2350. Which is a level not seen since April 2018. Since then, the pair has been slipping gradually.

Current levels of the exchange rate mark nearly a month of weak performance by the euro, leading the pair to a 2-month low. Presently, the EUR/USD is trading around 1.1980 to 1.2000. Euro bears are closing in on a potential support level for the pair at 1.1920. This is the last bottom before the formation of an uptrend in December. The persistent strength in the greenback across the board could be a result of the market anticipating the Federal Reserve to taper asset purchases sooner than planned.

Key Data Announcement Anticipated by Traders

Driving more attention from USD buyers is the latest data to be revealed tomorrow. Non-farm payrolls and unemployment rate for January are scheduled for Friday, 08:30 am EST. Considered the most important economic indicators, both figures will reveal how the economy fared throughout the month of January. In comparison, the US posted its first jobs decline in eight months in December. 140,000 people lost their jobs during the holiday month, while the unemployment rate remained unchanged at 6.7%. EUR/USD traders will be monitoring the reports to find out whether the economic slowdown will continue for a second consecutive month or if the jobs market is once again in recovery.

The US dollar is gaining against other currencies as well. The USD/CHF marks a fifth consecutive session to the upside. The lowest level reached in early January, 0.8755, acted as strong support for the bulls. The latter took the pair over 3% to the current market price of 0.9020. The USD/JPY is in its seventh-straight session in positive territory, hovering above 105.10, while the USD/CAD has been trading mixed for the past few days, currently gyrating around 1.2800. AUD/USD and NZD/USD have been trading fairly muted for the past couple of weeks, with a slight movement to the downside.

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