EUR/USD refreshes lows near 1.1960 ahead of US payrolls

• Recovery capped by dismal Euro-area services PMIs and retail sales data.
• A test of 1.1938 inevitable ahead of the US labor market report.

The EUR/USD pair stalled its recovery attempt near 1.1980 levels and came under renewed selling pressure following the releases of downbeat Eurozone services PMI and retail sales data.

The spot now looks set to test the four-month lows of 1.1938, as the Euro remains undermined amid slowdown in the Euro area manufacturing and services sector activity while the US dollar continues to ride higher amid signs of strengthening US economy and rising inflation expectations.

With the Eurozone PMIs and retail sales data out of the way, ‘the keenly watched US non-farm payrolls report will be the main feature from today's economic docket and gather all of the market attention. The US economy is anticipated to have added 194K new jobs in April and the unemployment rate is seen falling to 4.0%. The key focus, however, would be on the Average Hourly earnings data, expected to show a modest 0.2% m-o-m rise,” Haresh Menghani, FXStreet’s Analyst notes.

EUR/USD levels to watch

According to Slobodan Drvenica at Windsor Brokers, “Signals from oversold conditions have been so far ignored, as daily MA’s infirm bearish setup and south-heading 14-d momentum keeps bearish bias intact. A firm break below 1.1936 would open way for acceleration towards 1.1790 (Fibo 76.4% of 1.1553/1.2555), with upbeat US jobs data today needed to confirm scenario.”

“Conversely, sustained break above 200SMA would ease the immediate bearish pressure, while stronger reversal signal requires a lift and close above falling 10SMA (1.2080) and Fibo 38.2% of 1.2413/1.1937 fall (1.2119). Res: 1.2000; 1.2015; 1.2050; 1.2080. Sup: 1.1936; 1.1915; 1.1900; 1.1854,”Slobodan adds.