EUR/USD drops back to test 50-DMA, awaits NFP

The recovery in the EUR/USD pair ran out of legs ahead of 1.06 handle pre-Tokyo, since then the spot is on a retreat as the greenback bounces-back from three-week lows versus its main competitors.

EUR/USD rejected just below 50-DMA

Currently, the spot now drops -0.22% to 1.0581, hovering close to daily lows struck earlier at 1.0576, where 50-DMA intersects. The main currency pair came under fresh selling pressure over the last hour, as the recovery in the US dollar regains momentum, with the DXY revisiting daily tops at 101.73.

On Thursday, the EUR/USD pair rallied almost 150-pips on the back of a short-squeeze as markets unwound their USD longs following the release of less hawkish FOMC minutes. Focus now solely remains on the US labor market report due later on the day, particularly after a disappointing ADP jobs data, for fresh direction on the major. While the US trade balance, factory orders data as well as Fed official Evan’s speech scheduled in the NA session.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0613 (daily high). A break beyond the last, doors will open for a test of 1.0654 (Dec 30 high) and from there to 1.0709 (daily R2). On the flip side, the immediate support is placed at 1.0507 (5-DMA) below which 1.0463 (10-DMA) and 1.0427 (daily S2) could be tested.