EURUSD hits fresh highs near 0.9950 as dollar’s slide continues

• Dollar drops further on Friday despite NFP.
• After a busy week, now attention turns to US elections and CPI.
• EURUSD still down for the week, but reversal is euro positive.

The EURUSD rose further on Friday and hit a fresh two-day high at 0.9940, before pulling back to the 0.9900 area. The greenback is sharply lower across the board despite a better-than-expected NFP.

The employment numbers showed the US added 261K new jobs in October, above the 200K of market consensus. After an initial positive reaction, the Dollar then tumbled, and so far, it is having the worst day in weeks. An improvement in market sentiment contributes to weakening the Dollar amid job numbers and expectations that China will ease some of its Zero-Covid policies.

Next week, attention would be on US CPI numbers due on Thursday that should have a large impact on Fed policy expectations. The mid-term election will be on Tuesday.

Can the rebound continue?

“The EURUSD pair has spent the week below parity and posted a lower low and a lower high, a sign that bears are back. Profit-taking ahead of the weekend helped the pair to bounce on Friday, but the dominant bearish trend remains firmly in place”, explained Valeria Bednarik, Chief Analyst at FXStreet.

Bednarik warns the daily chart shows the bearish continuation is in doubt. “The EURUSD pair recovered above a directionless 20 SMA, which provides immediate support at around 0.9830, and seems poised to extend its recovery towards the next relevant dynamic resistance level, a bearish 100 SMA currently at around 1.0050.”

The pair is about to end the week with marginal losses and far from the weekly low, a positive sign for euro bulls. Still, it remains far from obtaining a weekly close the 20-week SMA at 1.0040.

Technical levels