EUR/USD challenges lows near 1.0540

The pick up in the demand for the greenback keeps EUR/USD depressed around daily lows in the 1.0540 area.

EUR/USD lower post-NFP

Spot has briefly tested highs above the 1.0600 handle after US Noon-farm Payrolls disappointed expectations during December.

However, the spike was ephemeral and the pair quickly corrected lower as market participants delved into the details of the release, showing the much-awaited Average Hourly Earnings have surprised to the upside.

Today’s results helped the Dollar to regain some ground lost following the recent sell-off, although they will not prevent the US Dollar Index to close its second consecutive week with losses.

Later in the session, November’s Factory Orders are due while Chicago Fed C.Evans (voter, dovish) and Richmond Fed J.Lacker (2018 voter, hawkish) are due to speak later. Previously, Cleveland Fed L.Mester (hawkish) said that three rate hikes during the current year seems reasonable, adding to USD buying.

EUR/USD levels to watch

The pair is now losing 0.50% at 1.0551 facing the next support at 1.0483 (20-day sma) followed by 1.0387 (low Jan.4) and finally 1.0350 (2016 low Dec.20). On the flip side, a breakout of 1.0619 (high Jan.6) would target 1.0654 (spike Dec.30) en route to 1.0677 (55-day sma).