EUR/USD climbs back over 1.09 as investors gear up for ECB rate call

• EUR/USD vaulted into fresh near-term highs to kick off the new trading week.
• Markets broadly sold off the Greenback after worse-than-expected PMIs.
• Thursday’s ECB rate call, Friday’s US NFP labor print loom ahead.

EUR/USD kicked off another Nonfarm Payrolls (NFP) week looking for higher ground, vaulting the Euro to its highest bids against the US Dollar in almost ten weeks, clipping over the 1.0900 handle. Monday’s one-sided trading leaves the Fiber overextended in bullish chart territory, and it will be several days until meaningful data hits newsfeeds.

Tuesday will carry the week’s momentum into a moderately thin economic calendar. Final German unemployment figures for May are due early during European market hours, and Tuesday’s US market session will follow up with US Factory Orders and JOLTS Job Openings.

Germany’s Unemployment Change in May is expected to hold steady at 10K MoM, with the seasonally-adjusted Unemployment Rate broadly expected to hold flat at 5.9%. On the US side, Tuesday’s upcoming MoM Factory Orders in April are forecast to ease to 0.6% from 1.6%, while JOLTS Job Openings are expected to ease slightly to 8.34 million MoM in April compared to the previous 8.488 million.

Firm early-week bidding set to clash with ECB rate cuts and NFP jobs data

Thursday’s ECB rate call will be closely watched by Fiber traders. The ECB is broadly expected to trim its Main Refinancing Operations Rate by 25 basis points to 4.25%, and with a first rate cut all but priced in, investors will be scrambling to take a look at the ECB’s Monetary Policy Report for signals about when a follow-up rate cut will be forthcoming.

Friday will close out an otherwise mild trading week with a fresh print of US NFP labor data. The US is expected to have added 190K new jobs through May, a tick higher than the previous month’s 175K. Investors desperate for rate cuts, which are currently pricing in a first rate trim from the Federal Reserve (Fed) in November, will be looking for downside revisions to key employment figures in order to knock the Fed into a faster pace of rate cuts.

EUR/USD technical outlook

EUR/USD drove into fresh ten-week highs on Monday, crossing 1.0900 and testing 1.0910 for the first time since late March. The pair has pushed deep into the north side of the 200-day Exponential Moving Average (EMA) at 1.0804, and overbought conditions could set into the pair and drag the Fiber back into consolidation territory. 

A long-running pattern of lower highs from 2024’s peak bids near 1.1140 is weighing on continued bullish pressure, though the pair has broken through a descending trendline and could make a leg higher after a brief pullback to the 1.0850-1.0800 region.

EUR/USD hourly chart

EUR/USD daily chart