The U.S. Non-Farm Payrolls shocked with a 339K reading well beyond the 190K reading expected, signalling a resilient U.S. labour market.  

Despite the robust jobs data, the market priced in a three out of four chance of the Federal Reserve pausing rates in the upcoming rates decision, with a higher chance of a hike now priced into the July decision. The EURUSD currency pair closed the week with a 0.15% loss. The German and Euro Area Services PMIs fell short of expectations, revealing structural weakness in the European economy.  

Technical 

The EURUSD currency pair has taken the route south as price action moved further from its 100-day moving average within a descending channel pattern. Support and resistance were established at the 1.06356 and 1.08292 levels, respectively.  

Despite bulls finding their feet in the prior week with a price breakout above the descending channel pattern, bullish momentum was short-lived as it found resistance at the 61.80% Fibonacci Retracement Golden Ratio. A selloff immediately commenced, with bears taking the front row as the pair declined. Bears will likely be in contention to lower the pair, with the 1.06356 support level a probable point of interest.  

In contrast, if bearish volumes subside, a reversal could be imminent. If bulls find their way back into the picture, the 1.07548 level, which forms the Golden Ratio, could come into play.  

Summary 

With Euro Area Retail Sales and Quarterly GDP growth looming, traders will be on tenterhooks as they determine whether a recession in Europe’s biggest economy could become a reality for the bloc. In addition, this week’s U.S. Labour Market reports will provide insight into whether a rate pause is warranted in the U.S. The 1.06356 and 1.08292 levels will be critical to watch as the pair currently twists and turns within the barriers.  

Sources: Markit Economics, Reuters, TradingView