- EUR/USD rejected near 1.11 in Asia, possibly due to risk aversion.
- EUR/USD could drop below 1.10 if the US non-farm payrolls data blows past expectations.
- Bull hammer reversal likely if the data misses estimates.
EUR/USD is currently trading at 1.1075, representing 0.10% losses on the day, having hit a high of 1.1097 in the Asian session.
The pair faced rejection near 1.11, possibly due to risk off tone in the global markets. Asian equities are ccurrently down, tracking the overnight loses on the Wall Street, courtesy of President Trump’s re-escalation of trade tensions with China.
The risk-off tone will likely overshadow Eurozone producer price index and retail sales data scheduled for release at 09:00 GMT.
Later in the data, the focus would shift from trade tensions to the US monthly labor market report.
Non-farm payrolls due at 12:30 GMT
The data is forecast to show the US economy added 164K jobs in July, having added 224K jobs in June.
The jobless rate is forecasted to remain steady at 3.7%. The average hourly earnings are forecasted to rise 3.2% year-on-year in July, following a 3.1% rise in June
A better-than-expected US data will likely lift yields and push EUR/USD below 1.10.
A combination of escalating trade tensions and a below-forecast US payrolls figure could strengthen the case for additional rate cuts by the Federal Reserve in the near future, leading to broad-based losses in the US Dollar. The EUR pairs may also take cues from President Trump's announcement on trade related matters with the European Union, scheduled at 13:45 EST.