EUR/USD continues to fluctuate, reflecting the aftermath of last week's payrolls report. The currency pair's performance was volatile, starting with a surge above 1.1900 on Monday, followed by a decline below 1.1900 after the US jobs report exceeded expectations. Since then, it has hovered just under 1.1900, lacking the momentum to break towards 1.1800. The technical analysis suggests a consolidation phase, with the price action resting between the 100-hour and 200-hour moving averages, indicating a neutral near-term bias. The key technical level is 1.1853, which is close to a significant option expiry, providing a potential floor for the price. With no major catalysts and a US holiday, the next significant move is expected to come from a break above or below these key levels. A push above the 100-hour moving average would signal a bullish bias, while a fall below the 200-hour moving average would suggest a bearish outlook, potentially leading to a test of the 1.1800 mark. The euro side of the equation appears limited, as all known factors are already priced into the currency. The ECB's stance and the market's lack of expectation for short-term changes in the euro area data keep the focus on the dollar side. The FOMC meeting minutes, US Q4 GDP, PCE price data, and PMI data are on the agenda, alongside two critical risk events. As markets assess the dollar's vulnerabilities, the de-dollarization and currency debasement narratives persist, with traders sticking to these themes. Despite the potential overvaluation, ING predicts a softer dollar will continue to support the EUR/USD pair, with a short-term fair value of 1.165, leaving room for some downside risks.
