Forex - EUR/USD gains as dollar rally takes a breather


Shutterstock photo - " The euro gained against the dollar on Monday after investors sold the greenback for profits after better-than-expected jobs and growth data released last week sent the U.S. currency posting hefty gains.

In U.S. trading on Monday, EUR/USD was up 0.34% at 1.3409, up from a session low of 1.3345 and off from a high of 1.3413.

The pair was likely to find support at 1.3298, Thursday's low, and resistance at 1.3548, Wednesday's high.

On Friday, the Bureau of Labor Statistics reported that the U.S. economy added 204,000 jobs in October, far surpassing expectations for a 125,000 increase.

A day earlier, official data showed that the U.S. economy grew 2.8% on year in the third quarter, well beyond expectations for 2.0% growth.

The figures fueled market sentiments that the Federal Reserve could soon announce plans to scale back its USD85 billion in monthly asset purchases, which drive down borrowing costs to spur recovery, weakening the greenback as a side effect.

Profit taking kicked in on Monday, especially after investors concluded that the Fed may likely leave its stimulus policies unchanged until Janet Yellen takes the helm of the U.S. central bank and holds her first policy meeting in March.

Further fueling profit taking were concerns that fewer high-quality jobs are being created when compared to retail, leisure and hospitality jobs.

The session saw little in the way of economic indicators on both sides of the Atlantic on Monday.

Elsewhere, the single currency was up against the pound and up against the yen, with EUR/GBP trading up 0.53% at 0.8390 and EUR/JPY trading up 0.45% at 133.02.

On Tuesday, Germany will release inflation data while the Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index. offers an extensive set of professional tools for the financial markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Forex and Currencies
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