EUR/USD reached a fresh four-month high at 1.08885 following softer U.S. payroll data that narrowed yield spreads with Germany, but gains faded as U.S. yields and the dollar rebounded late in the session. While the euro remains supported by improving euro zone economic sentiment and signs of weakening U.S. labor conditions, renewed dollar buying triggered by recovering Treasury yields and lower gold prices capped the rally.

Technically, the bullish outlook remains intact, supported by EUR/USD trading well above its 200-day moving average (1.0675) and the crucial 61.8% Fibonacci retracement level at 1.0795. Immediate resistance is at the recent high (1.08885), followed by the significant 1.0930-1.0950 zone. A breakout above this area could accelerate bullish momentum, targeting the psychological barrier at 1.1000.

Next week's U.S. economic data, particularly CPI and retail sales, will provide critical direction. Continued weakness in U.S. data could fuel further upside in EUR/USD. Conversely, stronger-than-expected data or rising Treasury yields could stall gains, bringing support at 1.0795 into focus.