Strong Dollar Pushes EUR/USD Below 1.0800 Mark

Summary:

The Greenback continues its rebound, further pressuring EUR/USD to breach the crucial contention zone around the 1.0800 region.

BUY EURUSD

Close Time

CLOSED

1.07983

Entry Price

1.08773

1.07603

1.13447 -0.00364 -0.32%

42.3

Pips

Profit

1.07603

1.08406

Exit Price

1.07983

Entry Price

1.08773

Fundamental Analysis

The EUR/USD pair reversed its earlier gains on Thursday, ending the day flat after reaching its highest level since March 21 above 1.0870. In the early European session on Friday, the pair traded within a narrow range below 1.0850 as investors awaited the release of US labor market data.

A rebound in the US Dollar (USD) occurred during the American session on Thursday, driven by hawkish remarks from Federal Reserve (Fed) officials and a shift towards negative sentiment in the risk environment.

Minneapolis Fed President Neel Kashkari questioned the necessity of rate cuts this year if inflation remains stagnant, while Richmond Fed President Thomas Barking highlighted the challenge of reconciling the current level of inflation with the progress required for rate adjustments.

Market expectations for the upcoming Nonfarm Payrolls (NFP) report anticipate a 200,000 increase in March, with the Unemployment Rate projected to remain steady at 3.9%. A robust NFP figure exceeding 250,000, unless significantly revised from February's increase of 275,000, could dampen expectations of a rate cut in June and prompt a favorable response in the USD.

Conversely, a disappointing NFP print below 200,000 might suggest a weakening labor market, reigniting optimism for a policy shift in June.

Currently, the CME FedWatch Tool indicates a 35% probability that the Fed will maintain the policy rate unchanged at 5.25%-5.5% in June.

Technical Analysis

EUR/USD declined aggressively with a huge bearish candlestick after a bullish USD Non Farm Payroll data was released. As we can see from the chart, the price came down to fill the Fair Value Gap and retraced about 50% of the Fibonacci levels from the previous upmove. I will be taking a short term long position from here towards the high just placing my stop loss slightly below the 61.8% Fibonacci level.

Strong Dollar Pushes EUR/USD Below 1.0800 Mark_1

BUY EUR/USD

STOP LOSS : 1.07603

TAKE PROFIT : 1.08773

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