EUR/USD fades the post-NFP spike, back below 1.1500 mark

   •  US economy added 134K new jobs in September; unemployment rate dips to 3.7%.
   •  Mostly in-line wage growth data reinforced Fed rate hike expectations and lift bond yields.

The EUR/USD pair faded the post-NFP knee-jerk spike to 1.1530 area and might now be headed back towards the lower end of its daily trading range. 

The US Dollar broke down of its daily consolidation phase after the latest US monthly jobs report showed that the US economy added 134K new jobs in September, much lower than 185K anticipated and worse than 201K in the previous month. 

The weaker NFP print, to some extent, was negated by a larger than expected fall in the unemployment rate, coming in at 3.7% as against a dip to 3.8% anticipated and 3.9% previous. Adding to this, average hourly earnings also matched market expectations and recorded a growth of 0.3% m/m, with the yearly rate standing at 2.8%, slightly lower than previous month’s 2.9% rise. 

Despite the disappointing headline figures, the market seems convinced that the Fed might continue raising interest rates. The same was evident from a sudden spike in the US Treasury bond yields, which helped limit any deeper USD slide and eventually prompted some fresh selling around the major. 

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair further towards 1.1430 intermediate support en-route the 1.1400 round figure mark. On the flip side, any attempted recovery back above the key 1.1500 psychological mark might confront fresh supply and is more likely to remain capped near the 1.1530 support-turned-resistance.