EUR/USD breaks lower sub-1.1650 on USD rebound, NFP eyed

• USD catches fresh bids across the board.
• Rejected near Aug lows again.
• US NFP – key risk event.

The EUR/USD pair brought an end to its bullish consolidative mode and broke to the downside in early Europe, now accelerating the declines below a break of 1.1650 – psychological support.

EUR/USD back to test 5-DMA at 1.1644

The spot’s upside attempts failed once again near August lows of 1.1662, prompting a fresh sell-off on the back of the renewed buying interest seen around the greenback against its main competitors. The USD index staged a solid rebound from a dip to 94.50 levels, now flirting with daily tops of 94.73, up +0.08% on the day.

The funding currency, Euro, also drifted lower, in response to persisting risk-on sentiment amid higher European equities and a recovery in Treasury yields across the horizon. However, the main driver of the latest leg lower remains the USD price-action amid a lack of fundamental news from the Euroland, as attention now turns towards the US labor market report due later on Friday for fresh near-term trading opportunities.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank, noted: “EUR/USD’s outlook stays negative, the market last week closed below 1.1662 the 17th August low and is struggling very near term to regain this resistance, it is side lined. It has recently completed a head and shoulders top pattern 1.2092-1.1662, targeting 1.1232. Given the close proximity of the 200 day ma at 1.1268 we will make this our downside target.”