The buying bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in January, dragging EUR/USD to the area of new lows near 1.0350.
The Relative Strength Index (RSI) indicator on the 4-hour chart stays flat at around 50, reflecting a lack of directional momentum in the near term.
On the downside, a strong support area seems to have formed at 1.0350-1.0360, where the 200-period Simple Moving Average (SMA) meets the Fibonacci 38.2% retracement of the latest downtrend. If this support fails, 1.0290-1.0300 (Fibonacci 23.6% retracement, round level) could be seen as next support before 1.0250 (static level).
On the upside, 1.0400 (Fibonacci 50% retracement) aligns as immediate resistance before 1.0440 (Fibonacci 61.8% retracement) and 1.0500 (static level, round level).
EUR/USD struggled to hold its ground on Thursday closed the day marginally lower, snapping a three-day winning streak. Early Friday, the pair trades in a narrow range below 1.0400 as investors refrain from taking large positions ahead of the highly-anticipated employment data from the US.
The cautious market stance helped the US Dollar (USD) stay resilient against its rivals and didn't allow EUR/USD to build on its weekly gains.
Nonfarm Payrolls (NFP) in the US are forecast to rise by 170,000 in January, following the impressive 256,000 increase recorded in December. In the same period, the Unemployment Rate is seen holding steady at 4.1%.
A positive surprise, with an NFP reading above 200,000, could support the USD with the immediate reaction and weigh on EUR/USD in the American session. On the other hand, investors could reassess the possibility of a 25 basis points (bps) Federal Reserve rate cut in March if the NFP disappoints with a print below 150,000. According to the CME FedWatch Tool, markets are currently pricing in a nearly-15% probability of a March cut. In this scenario, EUR/USD could extend its weekly uptrend heading into the weekend.
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