EUR/USD Edges Higher as US Jobs Data Delivers Mixed Signals
The European single currency found support near 1.1300 following the release of April’s Nonfarm Payrolls, which showed 177,000 new jobs—44,000 more than economists had forecast—while average hourly earnings dipped to 3.8% year-on-year and the unemployment rate held at 4.2%. The Dollar’s inability to break decisively higher despite a stronger-than-expected payrolls figure reflected traders’ relief that the US labor market remains robust without sending the economy into overheating territory. That dynamic left the EUR/USD pair trading back above 1.1350, recapturing 38 pips of Friday’s earlier slide.
Sideways Consolidation Persists Between 1.13 and 1.15
Since March, EUR/USD has oscillated in a narrow band, with the 1.1300 floor defended by Euro-zone importers taking advantage of a softer Dollar and the 1.1500 ceiling reinforced by lingering hawkish signals from the Federal Reserve. The April ISM Manufacturing PMI in the US printed 48.7 versus March’s 49.0, underscoring a cooling factory sector that tempered expectations for Fed rate hikes beyond July. Euro-zone data remain patchy: March industrial production in Germany contracted 0.5% month-on-month even as France saw a modest 0.2% rebound, leaving growth prospects on both sides of the Atlantic in limbo. Traders are now bracing for Wednesday’s ECB policy decision and the US ISM Services PMI on Monday, which together will influence whether EUR/USD can snap its month-long consolidation.
EUR/USD Technical Landscape: Key Levels to Watch
On the daily chart, the pair has formed a series of higher lows since mid-April, reflecting growing dip-buying interest as the 50-DMA at 1.1325 provides dynamic support. The 14-day RSI sits at 52, comfortably between overbought and oversold territory, suggesting room for a move either toward the psychological 1.1500 mark or back down to the 1.1300 hinge. A sustained close above 1.1420 would expose the April high of 1.1475 and invite fresh long positions. Conversely, a break below last week’s swing low at 1.1310 could catalyze a drop toward the 1.1250 mid-March trough, where buyers previously stepped in.
Correlation with Commodity Currencies and Haven Flows
Flows into AUD/USD and USD/JPY this week have mirrored Dollar sentiment, with AUD/USD rallying toward 0.6500 as risk appetite improved on faint US-China trade hopes, while USD/JPY eased back to 145.20 after briefly challenging its multi-week peak. The Australian Dollar’s strength signals that commodity-linked currencies are benefiting from both a weaker Dollar and firmer base-metal prices, whereas declines in USD/JPY reflect profit-taking after yen crosses breached key technical barriers. This cross-asset behavior underscores the importance of watching equity markets—specifically European banking shares, which have advanced 1.2% today—and US Treasury yields, which slipped 4 basis points on Friday, as they exert second-order effects on EUR/USD volatility.
Positioning Ahead of ECB and Fed Speeches
Next week’s ECB decision will hinge on euro-area inflation data, with March CPI at 2.3% year-on-year still above the 2% target but trending lower, fueling debate over the timing of future policy easing. President Christine Lagarde’s press conference could clarify the Bank’s view on growth risks versus price stability, potentially moving EUR/USD by as much as 80 pips in either direction. On the Fed side, comments from Chair Powell at the Jackson Hole symposium later this month will be parsed for clues about beyond-July rate cuts. Should US officials signal an earlier pivot toward lower rates, the Dollar would likely retreat, positioning EUR/USD for a retest of 1.1500.
Market Sentiment and Forecasts for EUR/USD
Speculative net longs in Euro futures have climbed to +120,000 contracts, the highest since early April, suggesting that leveraged accounts are already positioned for a Bullish outcome. Bloomberg consensus forecasts anticipate EUR/USD at 1.1450 by end-Q2 and 1.1600 by year-end, reflecting a mild tilt toward Euro resilience as US growth moderates. My own assessment leans toward a gradual drift higher, with a base-case target of 1.1500 in the coming fortnight, conditional on neutral Fed and ECB cues. A slide to 1.1250 remains a valid alternative if US data surprise to the upside or if Euro-zone industrial weakness deepens, at which point holding under 1.1300 would warrant a more defensive stance.
No matter the near-term outcome, the interplay of US labor metrics, ECB policy signals, and cross-asset flows will dictate EUR/USD’s directional conviction. Traders should monitor breakouts and breakdowns of the 1.1300-1.1500 range with heightened alerts around ECB’s interest-rate announcement and any fresh US fiscal-trade developments.