Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.0460.
• Add a stop-loss at 1.0620.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.0595 and a take-profit at 1.0670.
• Add a stop-loss at 1.0500.

The EUR/USD sell-off faded after the second day of Jerome Powell’s testimony in Congress. It remained flat at 1.0547, which was a few pips above the lowest level this month. With Powell’s statement done, the focus will be on the upcoming US non-farm payrolls (NFP) data.

In his testimony in Congress, Jerome Powell maintained the view that the Fed has more work to do in its fight against inflation. However, he maintained that a decision to go back to higher interest rate hikes has not been made. Instead, the bank will still be more data-dependent.

Some of the data the bank will focus on will come on Friday and Tuesday. The US will publish the latest non-farm payrolls (NFP) data on Friday. Economists believe that the labor market, especially the blue-collar side, is strong.

Their view is that the economy added more than 200k jobs in February after it added 504k jobs in January. The unemployment rate is expected to remain at a 53-year low of about 3.4%. Data published on Wednesday showed that the economy still has over 10.8 million vacancies. Another report by ADP revealed that private payrolls increased from 119k in January to over 242k in February.

If the labor market remains this tight, the Fed will likely continue its hawkish tone. The Fed will also react to next week’s inflation numbers. A case for more and higher rate hikes will be made if inflation remains much higher.

The EUR/USD also reacted to the relatively weak European GDP data. According to Eurostat, the economy failed to expand in the fourth-quarter as gas prices remained elevated. The economy was unchanged as the German economy contracted by 0.4%.

There will be no major economic data from Europe and the US on Thursday. The only key data will be the latest initial and continuing jobless numbers and challenger job cuts. Their impact on the pair will be limited.

EUR/USD technical analysis

The EUR/USD price made a bearish breakout on Tuesday after the initial Jerome Powell statement. It now remains below the lower side of the ascending channel shown in green. The pair moved below the 50-period moving average and the first support of the Woodie pivot points. At the same time, the MACD and signal lines moved below the neutral point. It has formed a double-top pattern.

Therefore, the pair will likely have a bearish breakout, with the next point to watch being at 1.046, the S2 of the Woodie pivot points.