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The EUR/USD pair is losing important technical control after the US Jobs Report outperformed expectations, with US Nonfarm Payrolls reaching a one-year high and causing substantial upward revisions to earlier data points. The pair is trading at 1.0792, down -0.72% as of writing.
The US economy continues to impress investors, with the unemployment rate holding constant at 3.7% in January. The pair has been dragging down the EUR/USD, falling to familiar lows below 1.0800 and touching 1.0780.
The EUR/USD has fallen out of a consolidation zone between the 200-day and 50-day Simple Moving Averages (SMA), ranging from 1.0900 to 1.0850. The pair is fallen more than 3% since December’s swing high of 1.1140.
Nonfarm Payrolls generally have a positive correlation with the dollar, meaning when payrolls’ figures come out higher-than-expected, the USD tends to rally and vice versa when they are lower. NFPs influence the dollar by their impact on inflation, monetary policy expectations, and interest rates.
A higher NFP usually means the Federal Reserve will be tighter in its monetary policy, supporting the dollar. The pair continues to drift into the low side in choppy trading, with the pair down over 3% from December’s swing high into 1.1140.
