EUR/USD rose on Friday, adding slightly to earlier gains after strong but less inflationary U.S. jobs data pointed to potentially fewer Fed hikes, increasing the likelihood of the roughly 0.9900-1.0100 range persisting until Thursday's ECB meeting.
The August data U.S. workforce expanded by a hefty 786k as waning pandemic savings, a sharply higher cost of living and weaker retirement portfolios force people back to work nAPN0PH3MH diminishing inflationary pressures and the need for rate hikes.
The implied peak rate in fed funds next year fell from 3.94% Thursday to 3.85%, while two-year Treasury yields slid 12bp, though two-year bund yields weakened 16bp, limiting EUR/USD gains to 1.0030 on EBS.
Further resistance is at 1.0050-54 from the 10-day Bolli and Thursday's highs, with offers into 1.0100 likely to hold before the ECB unless Tuesday's ISM services disappoints.
A big upside surprise could be needed to test Thursday's and August's 0.9910/005 20-year lows.
If the ECB hikes 50bp rather than the 75bp expected, EUR/USD could hit August's 161.8% Fibo target at 0.9724.
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