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EUR/USD opened the week at 1.1520, pressured by a strong US labor market report that saw 172,000 jobs added in May 2026, far exceeding the 85,000 forecast. The dollar's gains of over 1% last week highlight the US economy's resilience, which could prolong the Federal Reserve's hawkish stance. The euro remains vulnerable as the pair tests April lows, with key support at 1.1400 and 1.1300. Traders are closely watching for a breakdown below these levels, which could signal further weakness against the dollar.
The USD's strength is critical for forex traders, as it impacts cross-currency pairs and commodity prices. A sustained move below 1.1400 for EUR/USD would likely trigger broader risk-off sentiment, affecting equity and bond markets. Central banks' policy divergence remains a key driver, with the European Central Bank facing challenges in maintaining rate hikes amid slower economic growth compared to the US.
For MENA investors, the EUR/USD trend is significant for hedging and trade exposure. The next critical juncture will be the Fed's June meeting and upcoming ECB policy decisions. Traders should monitor the 1.1300 psychological level and Fibonacci retracement levels for potential reversal signals.
