EUR/USD: Upside capped near 1.1230, NFP eyed

Range play remains intact in the EUR/USD pair, with the spot finding buyers on every attempt to test 1.12 handle, while the upside remains capped by 1.1230 levels.

EUR/USD stuck in range, await fresh impetus from NFP

The spot is seen moving back and forth in a 15-pips narrow range over the last hours, having faded a brief spike to 1.1228 levels, reached on the release of slightly upbeat Spanish jobless data.

The gains remains limited amid a risk-on rally in the European equities, which weighs on the funding currency status of the Euro. The European equities rally +0.85% to +1.30% amid renewed optimism.

Meanwhile, the downside remains cushioned amid broadly subdued US dollar and renewed weakness seen in the US yields, suggesting that markets refrain from creating fresh USD positions ahead of the highly-influential US non-farm payrolls data.

Analysts at Westpac explain: “The nonfarm payrolls survey has continued to report strong employment growth through 2017, despite some volatile months. At 185k, the 2017 average monthly gain for payrolls is broadly unchanged from 2016. The household survey has been similarly strong, the unemployment rate falling to 4.4% in April.”

EUR/USD Technical Levels

Slobodan Drvenica at Windsor Brokers Ltd noted: “Near-term action remains supported by 10SMA (1.1204) which keeps immediate focus at the upside, with break above 1.1268 to open next targets at 1.1300/13. However, extended daily studies keep in play the risk of fresh weakness on repeated rejection under 1.1286 pivot.”

“Such scenario requires firm break of 1.1200 support, to generate stronger bearish signal and expose key near-term support at 1.1100 (consolidation low / Fibo 38.2% of 1.0820/1.1268 upleg / rising 20SMA), loss of which would signal double-top and reversal. Initial resistance lies at 1.1227 (hourly cloud top), ahead of 1.1256/68 pivots,” Slobodan added.