The EUR/USD managed to advance modestly Friday following the U.S. nonfarm payrolls data release, as the the greenback pulled back across the board. At the time of writing, EUR/USD is trading at the 1.0550 area, holding on to slight daily and weekly gains after pulling back from a daily high of 1.0598.
Nonfarm payrolls came out in line with market estimates. The U.S. economy added 428,000 new jobs in April, versus 391,000 expected, while the average hourly earnings rose 5.5% YoY and the unemployment rate remained at 3.6%.
However, with the Fed's monetary policy path set, the European Central Bank's gradual and accommodative monetary stance is the main factor that could continue to weaken the euro. In addition, risk aversion coming from the conflict between Russia and Ukraine and the outbreaks of COVID-19 in China will likely continue to favor the greenback.
From a technical standpoint, the outlook remains clearly bearish, according to the weekly chart, even though EUR/USD is poised to post its first weekly gain after four consecutive falls.
The daily chart shows the same picture as the pair continues to move sideways between 1.0500 and 1.0600 after a six-day losing streak seen in late April. The RSI has gained an upward slope but remains below its midline, while the MACD remains in sellers’ territory, although showing decreasing selling momentum.
On the downside, EUR/USD could find immediate support in the 1.0500-1.0490 area, where the psychological level converges with the weekly low. A loss of this area could expose the five-year low struck last week at 1.0470 and the 1.0400 zone.
On the other hand, immediate resistance is seen at the 20-day moving average, currently at 1.0710, followed by the 1.0800 area.
