The euro (EUR) is trading between 1.1530 and 1.1550 against the US dollar (USD) during the holiday-shortened session, with most markets closed on Good Friday. The pair is on track for a weekly appreciation of 0.3%, but price action has been trapped midway through its March trading range.
Mild risk aversion keeps euro zone rallies in check as the Iran war enters its 35th day, while markets focus, at least temporarily, on the U.S. nonfarm payrolls report due later on Friday. The US economy is expected to create 60,000 jobs in March. fresh jobs, which will partially offset the February decline of 92,000, with the unemployment rate remaining at 4.4%
Technical analysis: EUR/USD shows a neutral to bearish tone
The short-term bias of EUR/USD is neutral with a slight tilt to the downside following the rejection of the previous support trend line earlier this week. The Moving Average Convergence Divergence (MACD) line has slipped back below the signal line, highlighting the initial bearish trend, while the Relative Strength Index (RSI) is holding steady around the 50 level, suggesting no clear deviation.
Immediate support lies at Thursday’s low around 1.1510, thus far keeping bears from making a deeper reversal to the March 30 low at 1.1443 and the March 13 low at 1.1422.
Upside, initial resistance is at the intraday level of 1.1563. Going forward, the confluence of the above-mentioned broken trend line, currently located at 1.1645, with the resistance area between 1.1620 and 1.1640, which closed the bulls several times at the turn of March and April, will likely pose a significant challenge for the bulls.
(The technical analysis for this story was written with the facilitate of an AI tool.)
Employment FAQs
Conditions on the labor market are a key element in assessing the condition of the economy, and thus a key factor influencing currency valuation. High employment or low unemployment has a positive impact on consumer spending and therefore economic growth, increasing the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill vacant positions – may also have an impact on inflation levels and therefore monetary policy, as low labor supply and high demand lead to higher wages.
The pace of wage growth in the economy is of key importance to decision-makers. High wage growth means households have more money to spend, which usually leads to higher prices for consumer goods. Unlike more volatile sources of inflation such as energy prices, wage increases are seen as a key element of underlying and sustained inflation because increases are unlikely to be reversed. When deciding on monetary policy, central banks around the world pay particular attention to wage growth data.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks have explicit labor market powers beyond controlling inflation. For example, the United States Federal Reserve (Fed) has a dual mission: promoting maximum employment and stable prices. Meanwhile, the sole task of the European Central Bank (ECB) is to keep inflation under control. Still, despite all the mandates it has, labor market conditions are an significant factor for policymakers, given their importance as an indicator of the health of the economy and their direct link to inflation.
