Friday's big miss in the headline U.S. jobs number provided an excuse for EUR/USD short-covering, but the impact should be temporary.
The details of the U.S. non-farm payroll report were much stronger than the headline, with the participation rate strong enough to push the unemployment rate lower and the closely watched average hourly earnings coming in higher than forecast.
Given the likelihood of revisions to the jobs number, the report should eventually encourage EUR/USD selling, not short-covering.
The market was tilted towards taking EUR/USD higher after the lack of follow-through when key support at 1.1186 broke late Thursday.
The pause and consolidation should be temporary and if this week's U.S. data is solid, there should be further attempts to push EUR/USD below 1.1170.
The bearish EUR/USD view would be technically endangered if it closed above the 38.2 Fibo of the 1.1420-1.1176 move at 1.1269 and a break above 1.1310/15 where the 10- and 21-day moving averages converge would confirm the pair is back in range trading mode.
Conversely, a beak below 1.1170 should result in a test of the psychological support at 1.1000.
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