The EUR/USD pair extended its retreat to 1.0930 on Friday, pressured by renewed U.S. dollar strength. The U.S. Dollar Index (DXY) climbed to fresh weekly highs, reversing Thursday’s losses sparked by concerns over U.S. tariff-induced stagflation.
Earlier in the week, EUR/USD touched a multi-month peak of 1.1150, its highest level since late September. The rally was fueled by market anxiety over former President Donald Trump’s renewed tariff rhetoric, which drove investors away from the greenback temporarily. However, the bounce proved short-lived as traders shifted their focus to Friday’s Nonfarm Payrolls (NFP) report and Federal Reserve commentary.
The Relative Strength Index (RSI) on the 4-hour chart fell to 60, indicating a waning bullish trend. If momentum continues to decline and the pair fails to recover the 1.1000 level, further downside could materialize.
Technical Levels to Monitor Closely
Price action suggests EUR/USD may remain under pressure unless it reclaims critical resistance levels. Support and resistance thresholds are shaping near-term direction:
- Support Levels:
- 1.0950 – Static support zone
- 1.0900 – 20-period Simple Moving Average (SMA)
- 1.0855 – 100-period SMA
- Resistance Levels:
- 1.1000 – Psychological round number
- 1.1100 – Minor resistance
- 1.1150 – Thursday’s high and key multi-month barrier
A break below 1.0900 could signal a short-term trend reversal, while a close above 1.1000 might attract technical buyers back into the market.
All Eyes on Jobs Data and Powell’s Speech
The March NFP report, due later today from the U.S. Bureau of Labor Statistics, is expected to show 135,000 new jobs, down slightly from February’s 151,000. Market volatility may intensify if the print deviates from expectations:
- Below 100,000: Likely USD weakness, EUR/USD bounce
- Above 160,000: USD support, downward pressure on EUR/USD
In addition, Federal Reserve Chair Jerome Powell is set to speak later in the session at the Society for Advancing Business Editing and Writing (SABEW) conference. Powell’s remarks on inflation and economic risks could steer market sentiment into the weekend.
Last Thursday, Fed Governor Lisa Cook emphasized watching for persistent inflation pressure from tariffs, signaling the Fed’s bias toward caution. Should Powell echo those concerns, the USD may lose ground. However, a focus on upside inflation risks could reinforce the Fed’s wait-and-see approach, strengthening the dollar further.