EUR/USD experienced a volatile session, opening near 1.0825 in New York and swinging wildly between 1.0796 and 1.08415 following the release of U.S. jobs data. The non-farm payroll (NFP) report came in above estimates at 206k compared to the forecast of 190k. However, previous months were revised downward, with May's figure adjusted to 218k from 272k and April's to 108k from 165k. Additionally, the unemployment rate climbed to 4.1% from 4.0%, against an estimate of 4.0%. This combination of upward revisions and rising unemployment led to a sharp drop in U.S. Treasury yields, narrowing the yield spreads and keeping the U.S. dollar under pressure. As a result, EUR/USD traded up, hovering near 1.0830 in the late New York afternoon, up 0.13%.

The gains in stocks and gold further added to the dollar's weakness. Technically, the outlook for EUR/USD remains bullish, with rising Relative Strength Indexes (RSIs) and the pair trading above the cloud and the 200-day moving average, which offers support. Looking ahead, key risks for EUR/USD include Fed Chair Powell's testimony, as well as the upcoming U.S. June CPI, PPI, and University of Michigan consumer sentiment reports.

EUR/USD rallied above the daily cloud, hitting a 17-session high near 1.0850 on Friday. The mixed U.S. employment data suggests that the Federal Reserve might adopt a less restrictive stance. With the June NFP numbers higher than expected but previous months revised down, and unemployment ticking up, the market is anticipating a potential shift in Fed policy. Treasury yields fell sharply on the news, reinforcing expectations that the Fed may cut rates by a total of 50 basis points in 2024, with investors possibly also pricing in more aggressive cuts in 2025. December 2025 SOFR futures reached a three-week high, indicating that the U.S. economy might be slowing, prompting the Fed to consider a dovish stance.

The dollar's yield advantage over the euro has decreased as the German-U.S. 2-year yield spreads tightened near key resistance at -170 basis points. With these developments, EUR/USD bears may face a challenging and turbulent road in the coming months.

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