Investing.com – Thursday saw a sharp rebound in EUR/USD as the pair rallied as high as 1.0770 overnight and remains close to that Friday morning.
Recall that the Euro was supported yesterday by better-than-expected data for the German and Eurozone manufacturing PMIs, and ignored the weaker-than-expected figures for the CPI.
In addition, it should be noted that the Minutes of the ECB showed that certain members of the central bank had, during the previous meeting, pleaded for a higher rate hike than what was decided.
In the United States, the ADP report (EPA:ADP) showed much more job creation than expected, while weekly unemployment claims came in below expectations. However, this did not affect expectations for the next Fed meeting.
On the contrary, the probability of seeing the Fed decide on a pause in the rate hike on June 14 is 71.5% this morning against 64.5% yesterday morning, which explains the weakness of the Dollar, which has largely participated to the good performance of the EUR/USD during the day on Thursday.
As for the session on Friday, investors will be mainly interested in the NFP report on job creations US, knowing that a strong report, especially on wages, could lower the chances of a Fed pause, although admittedly the market's reaction to yesterday's strong ADP report puts question this reasoning.
Technical thresholds to watch on EUR/USD
Finally, from a graphical point of view, it should be noted that the EUR/USD is facing resistance consisting of the psychological threshold of 1.08 and the 100 MM days at 1.0812.
Higher is the MM 50 days at 1.0897 and the 1.09 level which forms the next resistance. Then, the major psychological threshold of 1.10 and this year's high at 1.1095 will be the next targets.
If further weakness in the Euro Dollar, Wednesday's low at 1, 0635 will be the first potential support, before the 1.06 level, then the major 1.05 level, where the 200-dma is currently located, and finally this year's low at 1.0480.
The rebound of the EUR/USD materialize against the NFP report this Friday?
