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• The EUR/USD currency pair found a fresh high above the 1.08 level after NFP figures sparked rate cut hopes.
• US economic data came in broadly softer on Friday.
• Coming up next week: European Retail Sales, US consumer sentiment.

The EUR/USD currency pair drove into a fresh weekly high on Friday, breaking above recent congestion after a broad miss in US Nonfarm Payrolls (NFP) labor and wages figures reignited broad-market hopes for an accelerated path towards Federal Reserve rate cuts.

US NFP Came in Soft, Hardened Rate Cut Bets

US NFP net job additions in April printed at 175,000, below the forecast 243,000 and away from the previous month’s 315,000, which was revised upwards from 303,000. Average Hourly Earnings grew by 0.2% month-over-month in April, below the forecast 0.3%.

ISM US Services Purchasing Managers Index (PMI) figures also declined, surprising markets that were expecting an uptick in forward-looking business operator sentiment. April’s ISM Services PMI printed at 49.4, a 16-month low, declining below the contractionary 50.0 level and missing the forecast print of 52.0 versus the previous 51.4.

A sticking point for rate cut hopes was ISM Services Prices Paid, which showed an increase to 59.2 month-over-month in April as business operating costs accelerated to the upside, climbing from 53.4.

Coming up next week, European Retail Sales figures are scheduled for Tuesday, and median market forecasts are expecting Eurozone sales to grow 0.6% month-over-month in March after the previous month’s -0.5% decline.

On the US side, Friday’s print of the Michigan Consumer Sentiment Index will provide a key finger on the pulse of how deflated consumer expectations for the US economy are getting. May’s Michigan Consumer Sentiment Index is forecast to ease slightly to 77.0 from the previous month’s 77.2.

EUR/USD Technical Outlook

The EUR/USD pair broke north of recent consolidation on Friday, ticking into a fresh weekly high of 1.0813 and climbing out of a rough supply zone between the levels of 1.0740 and 1.0720. The week’s low was parked at the 1.0650 mark, etching in a near-term swing high as bidders tried to knock the pair back into a bullish run.

Friday’s bullish push sent the EUR/USD duo into the 200-day Exponential Moving Average (EMA) at the 1.0800 handle, with a raft of late-week profit-taking pulling the pair back into 1.0760 as markets headed off for the weekend.

EUR/USD Hourly Chart

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EUR/USD Daily Chart

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