EUR/USD: Euro Consolidates Near $1.04 Ahead of Friday’s Nonfarm Payrolls. What’s Next?

Currency pair has been floating without a clear direction as traders keep an eye on White House news.

⛵Euro Floats Under $1.04

• The EURUSD pair was seen hovering near the $1.04 handle Friday morning as currency speculators were getting ready for the latest jobs data out of the US. The euro has been languishing against the stronger dollar and just this week it dived under the 50-day moving average. More bearish moves?
• Today’s jobs data, officially going by the name nonfarm payrolls, is likely to narrate the euro-dollar’s trajectory. Here’s what you should watch for.

🍓 Expectations Set

• Analysts have pinned their expectations on 156,000 jobs created in January (with some going for the more optimistic 169,000). In both cases, markets aren’t too enthusiastic about job growth in the first month of the year. The number is expected to land much lower than the 256,000 hires tapped in December.
• Where is the US dollar going? It depends. If the jobs number turns out to be an upside surprise, the greenback may shoot lower as more jobs indicates a hot economy, which suggests more interest rate cuts from the Federal Reserve.

🏛️ Fed and Interest Rates

• The US central bank is closely monitoring the monthly jobs figures as it plans its next move on interest rates. If the number shoots well under expectations, then officials will have another confirmation that it’s not a good idea to lower rates anytime soon.
• With that in mind, brace yourself for volatility and some trading opportunities — not just in the euro-dollar pair but across the forex board in general.