EUR/USD to resume its falls amid covid worries and a rethink about the Fed's moves

EUR/USD has been moving higher in response to Friday's somewhat mixed US Nonfarm Payrolls report. However, the general trend is to the downside – and has even received fresh reasons to support the move, as FXStreet’s Analyst Yohay Elam notes.

Why EUR/USD could plunge after the NFP-bounce

“The NFP served as a trigger to undo dollar longs ahead of the long Independence Day weekend. The Federal Reserve is unlikely to be in a rush to taper down its bond-buying scheme without persistent price pressures. That was Friday and now it is time for a rethink. There is nothing in the labor figures to derail the Fed from announcing it would print fewer greenbacks.” 

“In the old continent, Markit's final Services Purchasing Managers' Indexes for June are on the agenda, but these forward-looking gauges could already be old news – the rapid spread of coronavirus is of concern. The contagious Delta covid variant is making its way through Europe after making its way through the UK. It could derail the reopening.” 

“Support awaits at 1.1840, a cushion from last week, and then by 1.1808, the trough recorded on Friday and the lowest since April.”

“Some resistance is at 1.1880, which capped the pair’s recovery on Friday. It is followed by 1.1910, which held EUR/USD down in late June.”