EUR/USD consolidates near 1.1160 as strong US payrolls of 165,000 support the Dollar, offsetting hawkish ECB rhetoric and market expectations for 18bp of December rate hikes.
Lagarde said the ECB is watching indicators to decide whether a December rate hike is warranted after holding rates in October, scoring 6.2/10 on Speechtracker versus a 5.6 baseline. Markets still price 18bp of ECB hikes in December, which should support the Euro unless a deeper equity correction changes the picture.
The US added 165,000 jobs in October, up from 60,000 in September and beating estimates, with unemployment falling to 4.1%, reinforcing Fed expectations for a December rate hike. ING also notes global investors remain happy to hold Dollar cash while Treasuries perform their safe-haven role.
Hawkish ECB commentary (Lagarde flagging a possible December hike, market pricing 18bp) supports the Euro, but the 165,000 US jobs added in October versus 60,000 in September and a 4.1% unemployment rate keep the Fed on track for a December hike, supporting the Dollar. The pair sits below the 100-day SMA at 1.1412 with RSI around 41, and ING expects consolidation not far from 1.12.
The EUR/USD pair trades around 1.1160 as markets weigh a hawkish ECB against a resilient US labor market. While ECB President Christine Lagarde signaled potential December rate hikes, the US economy added 165,000 jobs in October, keeping the Federal Reserve on track for its own tightening cycle. Analysts at ING note that investors continue to favor Dollar cash, leaving the Euro under pressure below the 100-day SMA of 1.1412.
The ECB held rates steady in October, but Lagarde said many indicators between now and December will help determine whether a hike is necessary, and markets currently price 18bp of hikes for December.
The 165,000 jobs added in October and the drop in unemployment to 4.1% suggest the labor market remains resilient, keeping the Federal Reserve on track for a December rate increase, which supports the Dollar.
Because the strong October US labor market (165,000 jobs, unemployment down to 4.1%) keeps the Federal Reserve on track for a December rate hike, and investors are still happy to hold Dollar cash rather than rotate into Euros.
Resistance sits near 1.1190 and then 1.1325 and the 100-day SMA at 1.1412; support lies at the lower Bollinger band around 1.1125, then 1.1100 and the May 12, 2025 low of 1.0951.