EUR/USD rebounds from weekly lows, stays below 0.9800

• EUR/USD fell sharply with the initial reaction to US jobs report.
• Nonfarm Payrolls in the US rose by 263K in September.
• The pair remains on track to end the week little changed.

EUR/USD managed to erase a large portion of its daily losses but lost its recovery momentum before reaching 0.9800. As of writing, the pair was down 0.1% on a daily basis at 0.9780. Following the latest price action, EUR/USD remains on track to end the week flat.

Dollar capitalizes on upbeat NFP

Earlier in the day, the data published by the US Bureau of Labor Statistics revealed that Nonfarm Payrolls rose by 263,000 in September. This print came in better than the market expectation for an increase of 250,000 and helped the dollar outperform its rivals. Additionally, the Unemployment Rate declined to 3.5% from 3.7%.

With the initial reaction, the US Dollar Index (DXY) jumped to a daily high of 112.82 and forced EUR/USD to drop to a weekly low of 0.9726. Week-end flows and profit-taking, however, seem to be limiting the dollar's gains with the DXY retreating below 112.50 toward the London fix. 

Meanwhile, Wall Street's main indexes are trading deep in negative territory, making it difficult for EUR/USD to stretch higher. At the time of press, the Nasdaq Composite and the S&P 500 indexes were both losing more than 2% on the day.

Technical levels to watch for