FX.co ★ NTFX | EUR/USD

The foreign exchange market is abuzz with anticipation as the EUR/USD currency pair treads familiar ground. The Federal Reserve's decision to hold interest rates steady, as anticipated by many, has left investors yearning for a deeper cut in the coming months. The current market consensus leans towards a single rate reduction by November. European data remains a focal point, with the final European Manufacturing PMI (HCOB) due for release on Thursday. Expectations are for the data to mirror the preliminary figures. All eyes then shift to the US non-farm payrolls report on Friday, a data point poised to significantly influence market direction. Forecasts suggest April's payrolls will reach 243,000, a considerable drop from the prior month's figure of 303,000. Close scrutiny will be paid to data revisions, as layoffs continue to ripple across various sectors of the US economy. Investors are also keen to see average hourly earnings hold steady at 0.3% month-on-month in April, given growing concerns about inflation. For the past six trading sessions, the EUR/USD pair has been trapped in a consolidation zone, grappling to breach the 1.0700 resistance level. The 200-hour Exponential Moving Average (EMA) serves as a pivotal midline, with upper and lower boundaries estimated at 1.0740 and 1.0650 respectively. The daily candlestick chart hints at a near-term bottom established around 1.0600. However, the pair faces resistance on the downside from the 200-day EMA hovering near 1.0790.

A prominent sell-off has gripped the market over the past five days, tilting the short-term outlook towards a bearish trend. Technical indicators paint a similar picture, with the RSI lingering below 30 and the MACD trading beneath its trigger and zero lines, both underscoring the negative momentum. Should the sell-off intensify, the initial support level to watch sits at 1.0515, a level established during the November 1 low. Conversely, a bullish resurgence would likely encounter resistance at the 1.0655 level before approaching the 1.0695-1.0720 zone. A broken uptrend line, alongside the 1.0760 price point, could also act as hurdles before the pair reaches the 20-day moving average at 1.0780. The coming days promise to be eventful for the EUR/USD pair, with key data releases and technical levels shaping its trajectory.