EUR/USD's broader up trend may be nearing an end due to bullish influences having little impact and data possibly driving more aggressive ECB cuts, which leaves investors who are positioned long in need of help from upcoming U.S. employment releases, especially Friday's non-farm payrolls.

Downside surprises to September Italian and German price data suggest euro zone disinflation should bring inflation to the ECB's target.

The data trumped rallies in China stocks .SSEC and iron-ore DCIOc2 driven by hopes that China's economy will recover, which could boost European growth.

ECB President Christine Lagarde said the latest developments strengthen the central bank's confidence that inflation will return to target.

Lagarde also noted that some survey indicators suggest the economic recovery is facing headwinds.

The data and comments helped German yields US2YT=RR erase most of its earlier gains, boosting the dollar's yield advantage over the euro.

German-U.S.
spreads US2DE2=RR neared -152bps, their widest since Sept.
2.

Upcoming U.S. employment reports could determine whether EUR/USD's broader rally resumes or the downside risks increase.

October JOLTS.
September ADP, weekly claims and September payrolls are due this week.

Fed rhetoric indicated weakening of the labor market is not desired.
Upbeat reports may price out some Fed cuts, which could rally the dollar and send EUR/USD downward.

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