EUR/USD is trying to extend its rebound toward the 1.1450-1.1470 resistance zone after yesterday’s US employment report weakened the dollar. Nonfarm Payrolls rose by only 57,000 in June, well below expectations near 114,000, while the unemployment rate slipped to 4.2% from 4.3%.
The headline unemployment figure looked better, although weaker payroll growth and lower labor force participation made the report more negative for the dollar overall.
Fed rate expectations ease after labor data
The main market reaction came through Treasury yields and Fed expectations. Softer hiring reduced confidence that the Federal Reserve will need to keep policy pressure high for longer, even though wage growth remained steady at 0.3% month on month. As a result, the dollar lost momentum, with the WSJ Dollar Index posting its sharpest one-day decline since early May.
ECB caution limits euro upside
The euro is supported more by dollar weakness than by a clear improvement in eurozone fundamentals. The ECB remains cautious and data dependent after the Sintra forum, while Christine Lagarde emphasized that policy must adapt to a more volatile global environment. This keeps EUR/USD sensitive to US data first, especially inflation and Fed commentary.
Technical picture improves near key resistance
The hourly chart shows EUR/USD rebounding from the 1.1330-1.1360 area and breaking back above the short-term moving averages. Price is now trading inside the highlighted resistance band around 1.1390-1.1470, with momentum improving but not yet confirmed as a full trend reversal. A clean move above 1.1470 would open the way toward 1.1500-1.1520, while failure to break this zone could trigger consolidation back toward 1.1410-1.1390.
Outlook
Near term, the pair has a constructive bias while it holds above 1.1390, but the main test remains the upper boundary of the resistance zone. Bulls need confirmation above 1.1470 to turn the rebound into a stronger recovery. Until then, EUR/USD, as I wrote in EUR/USD rebounds inside key resistance zone, looks more like a dollar-driven correction than a fully established bullish trend.
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