Eurusd Steady Post Nfp

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Eurusd Steady Post Nfp

Eur/Usd Steady Above 1.0800 Post-Nfp

EUR/USD is holding on to its gains and is trading comfortably above the 1.0800 support during Friday's session. The upside in the EUR/USD is attributed to the weak NFP (Nonfarm payrolls) report, which showed a decline in average hourly earnings in June.

If we look at the past, one of the major driers of higher inflation was the average hourly earnings. Now that this indicator has declined in June, it has further reinforced the narrative of disinflation in the USA. So, it makes sense for the US Fed to now have more reason to cut rates rather than maintain the status quo.

Us Wage Growth Declines To 3.9%

On an annual basis, wage growth has inched lower to 3.9%, while May's reading was around 4.1%. Overall, the data has shown a weakening of the labor market, which has made the Fed's job of cutting rates a little easier.

The NFP report also showed fewer people were hired in June as compared to May 2024. This was confirmed by the unemployment rate, which climbed higher by +0.1% during June to near 4.1%.

While the EUR/USD has turned higher after the release of the NFP, the DXY has come under pressure. Why? The speculations have once again hit the market that the Fed will start cutting rates from September 2024.

This has sent the DXY lower towards the 105.00 handle, a fresh 3-week low for the dollar index. This also represents a broader weakness of the US Dollar against the G10 currencies.

Back to the EUR/USD, the pair is now on its way to closing the 7th day in green and has already stabilized above the major EMA lines (20 and 50) on the D1 chart. The EUR/USD has also crossed the 200 EMA on the D1 chart which is located near the 1.0800 handle.

So, even if the EUR/USD returns back towards 1.0800, it will serve as strong support and propel it higher as even the 200 EMA acts as dynamic support.

The RSI indicator on the D1 chart of EUR/USD shows a reading of 60.00, which means bullish momentum. At the same time, it also shows more upside is ahead as there's a lot of space before the RSI reaches overbought levels.

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