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EUR/USD Dips on Strong US Jobs Data, Eyes Next Week’s Inflation Report

The EUR/USD pair registered modest losses of 0.13% following a surprisingly strong US Nonfarm Payrolls (NFP) report that propelled the US Dollar (USD). Currently trading at 1.0822, the pair retreated from its daily high of 1.0847.

NFP Report: US Labor Market Surprises

Friday’s jobs data showed the US economy added 303K jobs in March, far exceeding forecasts of 200K and the revised February figure of 270K. The Unemployment Rate dipped to 3.8%, while Average Hourly Earnings aligned with expectations.

USD Strengthens, EUR/USD Retreats

The robust jobs data bolsters the US Dollar Index (DXY), which gained 0.155% to 104.36. US Treasury bond yields also climbed, with the 10-year note reaching 4.365%.

Fed Officials Weigh In

Richmond Fed President Thomas Barkin described the report as “quite strong,” noting uneven progress in reducing inflation. Boston Fed’s Susan Collins also commented, though not on monetary policy.

Mixed Signals from Europe

February’s German Factory Orders improved to 0.2%, bouncing back from January’s drop. However, Eurozone Retail Sales contracted by 0.5% MoM, falling further than expected.

Technical Outlook: Evening Star Pattern, Key Support Levels

The formation of an “evening star” candlestick pattern suggests potential for a drop below 1.0800. The Relative Strength Index (RSI) remains tilted downward, further supporting a bearish bias. A decisive break below 1.0800 would expose the April 2nd low of 1.0724, with 1.0700 as the next target. Resistance lies at the confluence of the 50 and 200-day Moving Averages around 1.0828/32.

Focus on Next Week: Inflation and ECB Meeting

Key events in the coming week include the release of US inflation data and the highly-anticipated European Central Bank (ECB) monetary policy meeting.