EUR/USD Overview The EUR/USD pair is growing for the second day in a row and is now very close to the 1.0550 mark. The EUR/USD pair strengthened from 10-month lows as the US currency weakened. However, the trend is still down, and US employment data will be critical to the next move in EUR/USD. After hitting a 10-month low around 1.0450, EUR/USD began to recover on Tuesday, rising more than 100 pips in total. However, this action is currently seen as consolidation. The euro's outlook will be better if EUR/USD closes consistently above 1.0630. Weak economic data for the eurozone helped confirm the general view that the European Central Bank is unlikely to raise interest rates further. Speeches by ECB members also pointed in this direction.
The dollar's path may depend on the US non-farm payrolls report, which will be released on Friday. The unemployment rate is suggested to fall slightly to 3.7%, and another 170,000 jobs are predicted to be created. While poor US employment data could allow EUR/USD to continue rising, strong US employment data could resume the pair's downtrend. The EUR/USD pair is still moving within the downward channel on the 4-hour chart, although it is far from the lower boundary of the channel. EUR/USD's 20-period simple moving average (SMA) is above it, and the pair is ahead of the ascending trendline at 1.0565. Also, the upside to 1.0600 is more likely if EUR/USD crosses this level. Neighboring support is formed at 1.0525, then 1.0500. Near-term lows could be tested if EUR/USD consolidates below 1.0495, and a break below this level could trigger further declines toward levels close to 1.0420.
