EUR/USD eyes fourth weekly gains above 1.0900 despite US Dollar’s bounce ahead of US NFP

• EUR/USD grinds higher as traders await the key US employment numbers after a mixed daily performance, retreating of late.
• Upbeat German data contrasts with downbeat US statistics to underpin bullish bias for Euro.
• Recession woes, pre-data anxiety join holiday-driven inaction to prod traders.
• US job numbers are the only game in the town to watch for fresh impulse, volatility expected.

EUR/USD bulls keep the reins around 1.0920, retreating of late, as it portrays the typical Good Friday inaction, as well as anxiety ahead of the US Nonfarm Payrolls (NFP), during the early hours of the day. The major currency pair witnessed a volatile Thursday amid the initial US Dollar rebound on recession woes before ending the day unchanged with downbeat US data contrasting with firmer statistics from the Eurozone.

Consecutive weakness in the US Dollar and downbeat US Treasury bond yields triggered fears of a recession in the world’s largest economy, which in turn allowed the USD bears to take a breather during early Thursday. However, another set of downbeat US jobs report reversed the greenback’s gains afterward as traders brace for the all-important NFP.

That said, US Initial Jobless Claims improved to 228K for the week ended on March 31 versus 200K expected and upwardly revised 246K prior. It’s worth noting that the Challenger Job Cuts for the said month rose to 89.703K from 77.77K prior.

It should be noted that Reuters raised fears of recession by citing the Federal Reserve (Fed) Chairman Jerome Powell’s preferred bond market indicator’s latest slump. “Research from the Fed has argued that the “near-term forward spread” comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction,” said the news.

On the same line, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said in her prepared remarks on Thursday that they expect the global economy to grow by less than 3% in 2023, down from 3.4% in 2022, per Reuters.

Elsewhere, Germany’s Industrial Production (IP) rose 0.6% YoY in February versus -2.7% market forecasts and -1.6% previous readings. The monthly figures also came in firmer than 0.1% expected, to 2.0% versus 3.7% prior. On Wednesday, Germany Factory Orders improved to -5.7% YoY for February from -12.0 revised down prior and -10.5% market forecasts while the MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

Amid these plays, Wall Street and US Treasury bond yields both pare weekly losses but fail to gain major acceptance from bulls.

Moving on, off in the major markets can keep the EUR/USD inactive and vulnerable to sharp moves amid less liquidity on the scheduled US employment numbers for March. It’s worth mentioning that the recently dovish Fed bets and downbeat US data give rise to hopes of a positive surprise and huge volatility in prices afterward.

Also read: Nonfarm Payrolls Preview: Markets fear depressing data, three scenarios for the US Dollar

Technical analysis

EUR/USD’s sustained trading beyond the 10-DMA, around 1.0880 by the press time, joins the gradually rising RSI (14) to favor bulls in aiming for the Year-To-Date high of 1.1033.