The EURUSD pair fell on the back of a stronger dollar that was boosted by the incoming employment data. The pair fell back towards the support region around 1.2250 and this is likely to lend some support in the short term. But the traders would watch for a break through this support and it remains to be seen whether this can be achieved during the course of the week.
EURUSD Under Pressure
The bears had failed to bring about a break of the support a couple of weeks back. Though they managed a break, they could not hold it and this enabled the pair to bounce back. The bears would be eyeing for a similar break in the short term and this time, they would want to make it count. On Friday, we saw the release of the employment data with the employment growth coming in much higher than expectations. But the unemployment rate ticked higher and the average wage earnings showed a drop.
This meant that the jobs that were added to the economy were the lower end jobs and this would not add much value to the economy. But this strong and steady data kept alive the hopes for 4 rate hikes during the course of the year and this was enough to spur more buying of the dollar which caused the pair to move lower. We can expect the dollar strength to continue in the short and medium term as well which should keep the pair under pressure in the days ahead.
Looking ahead to the rest of the day, we do not have any major economic news or data from the US or the Eurozone and hence we can safely expect the theme of high risk stock markets and higher dollar to continue to dominate the market headlines for today. This should push the pair towards the support once again but it is likely that the dollar would need a bigger fundamental push for the bears to bring about the break of the support.
This article was originally posted on FX Empire
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