12/02/26

12

The EUR/USD currency pair closed lower on Wednesday amid a rebound in the US dollar following the release of January employment data. As trading enters Thursday, the pair is moving sideways within a narrow range below the 1.1900 level, suggesting cautious market sentiment ahead of key economic indicators.

The US Bureau of Labor Statistics reported a notable increase in Nonfarm Payrolls, rising by 130,000 in January. This figure significantly exceeded market expectations of 70,000 and was a considerable bounce from the previous month’s revised gain of 48,000. The report also showed a modest decline in the unemployment rate, which fell to 4.3% from 4.4%, while the labor force participation rate edged upward to 62.5%. These figures have reinforced expectations that the Federal Reserve may pause its tightening cycle, although the probability of a rate hold in March has decreased notably, dropping below 10% according to futures data.

In the immediate aftermath of the employment report, the US dollar benefitted from increased confidence, catalyzing gains against major currencies. Meanwhile, market attention on Thursday shifts toward weekly initial jobless claims, although many investors appear to be awaiting the upcoming inflation data scheduled for release on Friday, which could influence the Fed’s policy outlook.

U.S. equity futures showed modest rises, around 0.2% to 0.3%, indicating stable risk sentiment. Should risk appetite strengthen later in the trading session, the US dollar may face some headwinds, potentially providing support for the euro.

From a technical perspective, the EUR/USD is currently trading at approximately 1.1880 on the four-hour chart. Moving averages continue to point higher, indicating underlying upward pressure. The pair remains above key support levels like the 50, 100, and 200 SMAs, but remains just below the 20 SMA at 1.1893. The relative strength index (RSI) stands neutral at 52, suggesting limited momentum. Technical analysts suggest that a sustained move above the 20 SMA could target the 23.6% Fibonacci retracement at 1.1923, with further resistance at the psychological level of 1.2000. Conversely, support is seen near the 38.2% Fibonacci level at 1.1860.