EUR/USD trims losses post-NFP, bounces to 1.0150

• EUR/USD extends the rebound from earlier cycle lows.
• US Non-farm Payrolls rose by 372K jobs in June.
• The unemployment rate remained at 3.6%.

Despite the rebound from lows, the selling interest around the single currency remains well and sound and motivates EUR/USD to keep the price action subdued around 1.0100/15 at the end of the week.

EUR/USD still faces a potential drop to parity

EUR/USD keeps the negative stance on Friday after the release of the Nonfarm Payrolls showed the US economy created 372K jobs during June, surpassing initial estimates for a gain of 268K jobs. The May reading was revised down to 384K (from 390K).

Further data saw the jobless rate unchanged at 3.6% and the key Average Hourly Earnings – a proxy for inflation via wages – rise 0.3% MoM and 5.1% from a year earlier. Additionally, the Participation Rate, eased a little to 62.2%.

What to look for around EUR

Bears maintain the EUR/USD under heavy pressure and the acceleration of the downside opens the door to a probable visit to the parity level sooner rather than later.

Indeed, the pair’s price action remains depressed and keeps closely following rising speculation around a probable recession in the region, dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.

Key events in the euro area this week: ECB Lagarde (Friday).

Eminent issues on the back boiler: Fragmentation risks. Kickstart of the ECB hiking cycle in July? Asymmetric economic recovery post-pandemic in the euro bloc. Impact of the war in Ukraine on the region’s growth prospects and inflation.

EUR/USD levels to watch

So far, spot is down 0.16% at 1.0140 and faces the next contention at 1.0071 (2022 low July 8) seconded by 1.0060 (low December 11 2002) and finally 1.0000 (psychological level). On the upside, a breakout of 1.0538 (55-day SMA) would target 1.0615 (weekly high June 27) en route to 1.0773 (monthly high June 9).