The EUR/USD currency pair has been under heavy selling pressure for most of the first half of the trading day. The pair has enjoyed a stunning nine-day winning streak. Now it’s time for it to enter a corrective phase that may push it back towards the 1.1700-mark in the near-term. Many other factors play into the current reader market conditions. Those elements are the performance of the US dollar and recent economic data.
The EUR/USD pair is seeing wild volatility ahead of the NFP. As of writing, it’s trading close to a bullish 20 Simple Moving Average (SMA) following a brief drop under this important line of defense. Beyond this first knee-jerk reaction is a continuing adjustment from the duo that’s seen it already drop to a touching low of 1.1747. The weakness of the Greenback has given some impetus, leading to a bounce from this low.
According to the daily chart, the euro dollar is undeniably overdue for a corrective move after surging to higher highs for an extended period of time. Specialists have identified important support area at 1.1745, 1.1695 and 1.1640. These approaches might serve as fences to further downward movement. Resistance levels are at 1.1830, 1.1880 and 1.1910. Such levels would certainly stymie any effort to launch a rebound.
From the 4-hour chart, these 100 and 200 SMAs are pointing convincingly up. Both of these indicators are far below the current market level. These moving averages can be of great help with further predicting which way the EUR/USD pair will move in the future.
One thing has clearly soured market sentiment, that’s been a confluence of political and economic events coming out of the U.S. The recent political drama, combined with disheartening jobs reports have all fed into a significant downturn in market sentiment. The June ADP Employment Change report just showed a loss of 33,000 jobs. This shocking figure was much worse than analysts had expected. The softness in the data has kept downward pressure on the Greenback. This development has further allowed the EUR/USD pair to bounce from its daily low.
To make things worse, political developments around US President Donald Trump have added to the fatal cocktail and soured moods even more. Considering that the US Senate just squeaked Trump’s “One Big Beautiful Bill” through with a razor thin Republican majority, this sounds pretty radical. This legislative victory came despite rampant speculation about the tax cuts Trump had promised, which now seem up in the air. Given those developments, volatility has risen significantly across the markets, changing the trading landscape for the EUR/USD pair.
In fact, President Trump has been very transparent with his agenda to undermine Federal Reserve Chair Jerome Powell. Far from causing a major stir, these comments have soothed market sentiment. Trump’s bullying over Powell’s job has added to the confusion. Consequently, investors today are wary of unpredictable shifts in monetary policy that might send currency markets up or down.
When stocks went south on news of the political pivot and biting economic uncertainties, the Greenback lost ground on that development as well. The recent slide in dollar strength has provided the EUR/USD pair with a short-term lift. Consequently, it has since bounced back from its intraday low.