EUR/USD reduces some losses as US job numbers fall short

After bouncing back from its weekly lows just under 1.1580, EUR/USD has climbed back above 1.1600, indicating a positive shift on the daily chart. This uptick appears partly driven by disappointing US jobs data. However, traders seem hesitant to heavily short the US dollar (USD) ahead of an upcoming economic report from the US set to be released later this week.

Private employment data from the US showed that an average of 2,500 jobs were cut weekly in the four weeks ending November 1. That’s an improvement from the previous week’s average of 11,250, which suggests some weakness in the labor market, putting additional pressure on the Fed to consider more rate cuts in their future meetings.

On a more optimistic note, US factory order data for August reflected a 1.4% increase, aligning with market expectations, which countered the 1.3% decline noted the month prior. Still, this news didn’t significantly influence the US dollar.

Currently, Federal Reserve President Michael Barr is addressing the audience, followed by Richmond Fed President Thomas Barkin. But investors are likely adopting a cautious stance ahead of Thursday’s non-farm payrolls report.

Daily Digest Market Trends: Currencies fluctuate within a range amid cautious markets

• The euro (EUR) is gaining back some lost ground but continues to trade within a tight range. Market players are eager for more comprehensive US data to gain insights into the economic landscape and the Fed’s stance on monetary easing.
• On Monday, the New York Empire State Manufacturing Business Index exceeded expectations for November, registering a rise to 18.7 from 10.7 in October, contrary to predictions of a drop to 6.0.
• In addition, construction spending for August saw a 0.2% increase, surpassing a forecasted decline of 0.1%, according to a delayed report from the U.S. Census Bureau. Moreover, July’s figures were revised to show a 0.2% increase instead of a previously recorded 0.1% decrease.
• Factory orders are expected to show a recovery, with a 1.4% rise in August, contrasting with a 1.3% decline in July, which was reported just before the government shutdown.
• Moreover, remarks from Fed President Michael Barr and Richmond Fed President Thomas Barkin might provide further insights regarding the December policy meeting.

Technical analysis: EUR/USD remains under pressure and 1.1580 is around the corner

EUR/USD has rallied back above the 1.1600 mark; however, its recovery attempts appear somewhat fragile. The 4-hour Relative Strength Index (RSI) is on the verge of exceeding the critical 50 threshold, though the Moving Average Convergence Divergence (MACD) is still showing a red bar.

Examining the broader context, the pair has pulled back from a trendline resistance and the session low is hovering near 1.1580. Looking downwards, key areas to watch include the lows from November 7th, 10th, and 11th, which are situated around 1.1535-1.1545, as well as the November 5th low near 1.1470.

On the upside, the previous support zone around 1.1610 could challenge any bullish momentum before hitting the upper boundary of the bearish channel, currently around the 1.1635 level. Beyond that, attention will turn to the high points near 1.1670 from October 28th and 29th.

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