EUR/USD Takes Out February Low Ahead of US Jobs Report
EUR/USD takes out the February low following the failed attempts to trade back above the 50-day SMA, and developments coming out of the US may keep the exchange rate under pressure as the NFP report is anticipated to show another rise in employment.
EUR/USD fails to defend the opening range for March as Federal Reserve Chairman Jerome Powell warns of a higher trajectory for US interest rates, and the exchange rate may struggle to hold above the January low amid growing speculation for a 50bp Fed rate hike.
According to the CME Fed Watch Tool, market participants are pricing a greater than 70% probability for the Fed funds rate to increase to a fresh threshold of 5.00% to 5.25% on March 22, and it remains to be seen if Chairman Powell and Co. will project a steeper path for US interest rates as the central bank is scheduled to update the Summary of Economic Projections.
EUR/USD trades to fresh monthly low of 1.0524 after failing to push back above the 50-day SMA, and the exchange rate may attempt to test the January low as long as it holds below the moving average.
Failure to defend the yearly opening range may push EUR/USD towards the December 2022 low, with a move below 1.0370 raising the scope for a run at the 200-day SMA.
However, lack of momentum to test the January low may lead to range bound conditions in EUR/USD, with a move above 1.0610 bringing the 50-day SMA 1.0723 back on the radar.