EUR/USD: There is a good chance that Friday will belong to bulls

EUR/USD has been extending its decline amid ongoing Fed-related dollar strength. The pair is already at the lowest since early April and looks to be digging the bottom – but a temporary reprieve may arrive in response to the all-important US jobs report, in the opinion of FXStreet’s Analyst Yohay Elam.

US Nonfarm Payrolls are set to trigger high volatility

“June's Nonfarm Payrolls figures are forecast to show an increase of 690,000 jobs, up from 559,000 in May. However, there are several reasons to doubt such an outcome. That could allow the greenback to take a breather.”

“The dollar has been marching higher since mid-June when the Federal Reserve announced its openness to tightening monetary policy – buying fewer bonds. It may be high time for a correction, and the NFP could be the trigger.”

“Will a potentially disappointing jobs report change the longer trajectory of the dollar? Probably not. The Fed is indeed leaning toward printing fewer greenbacks, with the hawkish camp becoming larger.”

“Moreover, the dollar has room to rise against the euro, as the European Central Bank seems keen on maintaining its loose monetary policy. In addition, concerns about the resurgence of coronavirus in Europe – led by the Delta variant – may pile pressures on the common currency.”

“Some support is at the daily bottom of 1.1835, which is also the lowest since June. It is followed by 1.1820, a resistance line from April. Resistance is at 1.1880, followed by 1.1910, and then by 1.1950 and 1.1950 – all capped EUR/USD on its way down in the past week.”