EUR/USD small rebound from 1.1900 handle

• Both FOMC on Wednesday and NFP on Friday trigger USD sell-off followed by a recovery.
• Next week will see the US inflation on Thursday with the Core Consumer Price Index expected at 1.9% for April.

The EUR/USD is trading at around 1.1956 down 0.30% on Friday. 

The single currency is correcting higher slighlty after the NFP-led sell-off sent EUR/USD a few pips close to the 1.1900 handle. 

The two main features of the week were the FOMC statement on Wednesday and the NFP and wage’s growth this Friday. 

The Non-Farm Payroll report for April came below forecast at 164K against 192K expected. The wages (average hourly earnings) came below forecast as well at 2.6% year-on-year versus 2.5% expected. On the other hand, the unemployment rate fell to 3.9%, it is the lowest level since December 2000. The NFP and wage growth was far from stellar but not disastrous to the point to lower investor’s expectations for the Federal Reserve Bank to go on with its policy normalization and hike at least three times in 2018.

Earlier in the week, the FOMC statement revealed that inflation was on track and should be reached within 12 months. However, no mention of the rate hike in June was made and the Fed telegraphed that it was somewhat not in a hurry to raise rates. This initially led to a USD sell-off followed by a recovery, much like today with NFP as investors are confident that the Fed will follow through with the policy normalization.

Next week will be rather light on the macroeconomic calendar except for the US inflation data on Thursday with the Core Consumer Price Index expected at 1.9% for April.

EUR/USD 4-hour chart 

The trend is bearish. Supports are seen at 1.1817 and at 1.1741 swing lows while resistances are seen at 1.1937 swing low and at 1.2000 figure.