The EUR/USD pair rebounded to the high side of its recent range, surpassing the 1.0700 mark as market risk appetite stabilized ahead of the US Nonfarm Payrolls (NFP) report. Investors are closely watching the US labor figures, with expectations of 243K net job additions in April. A slowdown in hiring could potentially increase the chances of a rate cut by the US Federal Reserve, as the economy continues to outpace others.
US Average Hourly Earnings are anticipated to remain steady at 0.3% month-on-month, with concerns about inflationary pressures. Market expectations suggest a possible rate cut by the Fed in September, with a 62% likelihood of at least a 25 basis point reduction.
Technically, the EUR/USD pair is testing the upper end of its consolidation range, with resistance between 1.0750 and 1.0720. The daily chart shows a pattern of lower highs and lower lows, indicating bearish momentum. The pair remains below the 200-day Exponential Moving Average (EMA) at 1.0971, down 3.7% from its recent high.
In conclusion, the EUR/USD pair is closely tied to upcoming US labor data, which could impact future rate cut decisions by the Federal Reserve. Traders are closely monitoring the charts for any signs of directional bias as the pair continues to navigate its current range.