The EUR/USD pair took a hit, dropping to 1.0800 once again, erasing gains made earlier in the week. This decline came after US Nonfarm Payrolls exceeded expectations and ECB President Lagarde hinted that a follow-up rate cut may not happen as investors had hoped.
In May, the US added 272K new jobs, surpassing the forecast of 185K, with a slight revision to the previous month’s figures. Additionally, US Average Hourly Earnings grew at a faster pace than anticipated, further boosting the US Dollar. Despite a slight increase in the US Unemployment Rate to 4.0%, the strong labor market and rising wages dampened hopes for a rate cut.
The ECB’s recent rate cut may not be followed by another in July, as President Lagarde emphasized the need for more progress on inflation before considering further cuts. This cautious stance from the ECB head disappointed Euro bulls looking for a rebound.
Looking ahead, the EUR/USD pair faces technical challenges after Friday’s drop, with the pair slipping to the 1.0800 level and testing the 200-day Exponential Moving Average. Traders will be monitoring key technical levels for a potential rebound, but a breakdown below a declining trendline could push the pair towards 1.0750 before finding support.
Overall, the EUR/USD pair remains volatile following the latest economic data releases and central bank statements, with traders closely watching for any further developments that could impact the currency pair’s movement.