The EURUSD continued to be under pressure on Friday, having tested its early October low of around $1.1530. The single currency is being hurt by a sharp drop in expectations for an ECB rate hike, with Christine Lagarde saying on Thursday that there will likely be no hike next year, while market participants were expecting a 10-bps increase.
The dollar was therefore supported by the dovish tones of the ECB and BoE and boosted by the monthly U.S. jobs report. The consensus stood for 450,000 jobs created in November and the unemployment rate to fall to 4.7%, with actual figures coming in at 531,000 jobs created and 4.6% unemployment.
The better-than-expected readings are bolstering the prospects for Fed tightening, which is positive in supporting the dollar and maintains pressure on the euro as a result.
With no daily close below $1.1530, the risk/reward ratio favors short-term buyers above this support. Traders may look to short the EURUSD based on the unfavorable fundamentals while keeping an eye for the price action in the run-up to $1.1530.
Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.