EUR/USD on Edge as Markets Await Key Employment Data

EUR/USD remained under pressure on Wednesday, holding at 1.1629. The US dollar continues to draw support from difficulties in negotiations between the US and Iran, as well as a renewed escalation of tensions in the Middle East, which has increased demand for safe-haven assets.

According to the US Central Command, Iran launched ballistic missiles towards neighbouring states. In response, US forces carried out strikes on targets on Qeshm Island following alleged attacks linked to Tehran.

The ongoing conflict has kept energy prices elevated, fuelling concerns about inflation and reinforcing expectations that interest rates may remain higher for longer than previously anticipated.

Additional support for the dollar came from US labour market data. Figures released on Tuesday showed that job openings rose to their highest level in nearly two years in April, while layoffs declined. The data highlighted the resilience of the US economy despite ongoing geopolitical and economic uncertainties.

Investor attention is now turning to the ADP report, which may provide further insight into labour market conditions.

However, the key event of the week remains Friday’s Non-Farm Payrolls report, which could offer important clues regarding the Federal Reserve’s next policy steps.

Technical Analysis

On the H4 EUR/USD chart, the pair is trading within a consolidation range around 1.1635, currently extending between 1.1605 and 1.1654. A move lower towards 1.1585 is likely. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.

On the H1 chart, EUR/USD has reached 1.1655 and is now moving lower towards 1.1585. A corrective rebound to 1.1636 may follow, before a further decline towards 1.1555. The Stochastic oscillator confirms this outlook, with its signal line around the 50 level and pointing downwards towards 20.

Conclusion

EUR/USD remains under pressure as geopolitical tensions and strong US labour market data continue to support the dollar. With the ADP report and Friday’s Non-Farm Payrolls release approaching, traders are likely to remain cautious. At the same time, technical indicators suggest a bias towards further short-term weakness in the pair.

By RoboForex Analytical Department

Disclaimer:Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.