The EUR/USD currency pair continued to lower its safe range by holding the line above 1.1440 throughout the Asian trading hours on Friday. Market participants are anxiously waiting for tomorrow’s release of the United States Nonfarm Payrolls (NFP) figures for the month of May. This potentially market moving heavyweight economic indicator is worth paying attention to!
With less than a week until the FOMC announcement, investors are eagerly awaiting a change in direction from this currency pair. The NFP data, which will be published at 12:30 GMT, is expected to provide insights into the health of the U.S. labor market. Even just a modest miss in the ADP employment number can move currency markets, including the dollar. For that reason, the current stability in EUR/USD is remarkable indeed.
Currently, EUR/USD hovers at the 1.1440 level, which is a sign of jittery mood from market participants. Analysts are concerned this tight range could be a sign of the market’s wait-and-see approach ahead of the soon-to-be-released NFP report. In the past, positive and robust results from the NFP data lead the U.S. dollar to appreciate in strength, and conversely, negative, disappointing figures will weaken it.
Investors tend to use this quiet period preceding big announcements as an opportunity to re-evaluate their holdings. This can frequently result in longer periods of consolidation, like the one currently underway in EUR/USD. How the market will continue to react after the data comes out will probably decide the next direction of this currency pair.