After a series of dismal economic data from the US this week, the dollar continues to lose ground against major counterparts. EURUSD saw a short-term rally on Thursday, with the 1.10 handle served as a local resistance. Today, the common currency preserves a bullish bias amid a broadly weaker greenback.
Now, market focus shifts to the upcoming US NFP jobs data which could paint a clearer picture of the US economy amid the increasing signs of a recession. Should employment growth come in lower that 145-150K, traders will be disappointed once again, with wages data will also be important. Bleak data will increase the odds of a rate cut by the Federal Reserve in October.
In this scenario, risk aversion will reemerge and the greenback will extend the decline. EURUSD thus could get back above the 1.10 handle and target the immediate local resistance around 1.1025. Also, the Fed’s Powell will deliver a speech later in the day and his tone could affect the dollar as well. A potentially dovish rhetoric will increase the selling pressure on the USD.