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EUR/USD inching higher, near 1.2960

FXStreet (Edinburgh) - The shared currency is looking to consolidate the rebound from recent lows near 1.2920, lifting EUR/USD to the 1.2955/60 band so far.

EUR/USD upside capped?

The likeliness of a better-than-expected Payrolls number in the US economy (225K in August exp.) will surely give further wings to the current USD momentum, weighing on the EUR and sending spot lower. While the after taste of the ECB statement still remains in the markets, traders will attempt to gauge and price in the size of the upcoming ECB purchases of bonds and ABS starting in October. Jane Foley, Senior Currency Strategist at Rabobank, commented, “we are of the view that constrained US wage growth data will delay a Fed rate hike until the end of next year. While we are of the view that the USD has embarked on a long-term recovery, a delay to Fed rate hikes would suggest that the downtrend in EUR/USD will be littered by pullbacks”.

EUR/USD levels to consider

The pair is now up 0.10% at 1.2957 with the next resistance at 1.3030 (high Sep.4) followed by 1.3110 (low Sep.2) and then 1.3154 (high Sep.4). On the flip side, a breakdown of 1.2920 (low Sep.4) would aim for 1.2788 (61.8% of 1.2042-1.3995) and finally 1.2755 (low Jul.9 2013).

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