Foreign exchange markets maintained focus on forthcoming U.S. employment data, which traders viewed as a critical indicator for Federal Reserve monetary policy decisions later in the year. The anticipated nonfarm payrolls report was positioned as the primary market catalyst following the previous week’s central bank meetings across major economies.
The European Central Bank maintained its key interest rate on overnight deposits at 2.25% and reiterated its data-dependent approach. Market participants turned attention to German industrial production and eurozone retail sales figures, seeking signals about potential recovery in domestic demand across the currency bloc. Policymakers had emphasized that inflation was moving toward the European Central Bank’s 2% target, though some officials suggested further monetary tightening might remain warranted despite potential upside inflation risks.
The Bank of England held Bank Rate at 3.75%, leaving sterling traders to anticipate upcoming economic indicators. Investors were preparing to assess labor market activity, consumer spending, and business performance data to evaluate whether inflation declines could be sustained without triggering significant growth slowdowns. The U.S. payrolls report remained the dominant driver of foreign exchange sentiment throughout the period.
The U.S. Dollar Index declined to 99.76, moving below the psychological 100.00 threshold and challenging a key ascending trendline at 99.42 after being rejected at 101.52. The index traded beneath its 50-day exponential moving average at 100.38 while remaining marginally above its 100-day EMA at 99.92, reflecting weakening bullish momentum. The Relative Strength Index had fallen to 36, entering oversold conditions.
GBP/USD traded near $1.3459 within a consolidation range, remaining above both the 50-day and 100-day EMAs. EUR/USD attempted a rebound from earlier lows, testing a descending trendline near 1.1559 while holding above its 50-day EMA, though remaining below the 100-day EMA at 1.1543. The euro pair’s RSI strengthened to 62, suggesting improving upward momentum.
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