EUR/USD extends recovery from 2-month lows, focus remains on NFP

The EUR/USD pair extended its recovery momentum from 1.1100 neighborhood and is now trading with only marginal losses ahead of US monthly jobs report.

Currently hovering around 1.1140 level, the pair on Thursday broke below the very important 200-day SMA and subsequently dropped to nearly two-month lows during early European session on Friday. 

The pair, however, found some buying interest at lower levels after German and French industrial production for the month of August surprised on the upside by printing a higher-than-expected growth of 2.5% and 2.1% respectively. 

Friday's key focus would remain on the US monthly jobs report, slated for release later during NA session. Market consensus is pointing the headline NFP print to come-in to show addition of 172K jobs in September, higher than 151K jobs added in the previous month.

Today's US employment details would be a key driver of market expectations over the timing of next Fed rate-hike action and hence, would eventually be an important factor assisting investors to determine the greenback's near-term trajectory.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The pair has an immediate support at 1.1080/90, a daily ascendant trend line coming from November 2015 low of 1.0505. Should the price break below the mentioned line, there's scope for a steeper decline, down to the 1.1000/40 region, with a weekly close around this last opening doors for a downward extension towards 1.0850 next week."

She further adds, "If the pair recovers ground, however, 1.1160 is the immediate resistance, followed by the 1.1200 figure. Gains beyond this last seem unlikely, yet an extremely disappointing employment report can take the pair up to 1.1245."