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Jul 02 - 11:55 AM

EUR/USD - COMMENT-EUR/USD Bears Likely See An Opportunity After US Jobs Data

By Christopher Romano  —  Jul 02 - 09:44 AM

EUR/USD spiked down to 3-month low as the dollar and U.S. rates rallied on Friday's above-forecast June non-farm payrolls nAQN04DFXC, but a sharp reversal of the drop followed, which, should the bounce extend, could be an opportunity for bears.

December 2022 Eurodollar futures EDZ2 erased the post-data drop and turned positive, which helped sink the dollar and rally EUR/USD into positive territory.

EUR/USD price action resulted in daily technicals flashing warning signs for shorts.
The pair climbed back above the 76.4% Fibo of 1.1704-1.2266, a daily bull hammer formed and daily RSI diverged on the new low.

EUR/USD bulls should tread cautiously though.
Much of the market's FX and interest rates reactions after the data could be profit taking as many investors had priced in an upbeat result nL2N2OE0Y2.

Once the correction runs its course, EUR/USD bears could benefit.
The U.S. economic recovery from COVID-19 and vaccination rates should keep the Fed heading towards a path of less accommodation.

Investors are likely to lean toward the Fed discussing tapering while also expecting a Q3 or Q4 2022 rate hike.
Those expectations should underpin the dollar.
EUR/USD corrective rallies likely remain selling opportunities.

For more click on FXBUZ


eur/usd Click here

edz2 Click here

Source:
Refinitiv IFR Research/Market Commentary

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