EUR/USD steadies near 1.1610 as ECB hawkishness offsets Fed

EUR/USD was steady near 1.1610 on Friday after forming a base just above 1.1580. The pair traded in a narrow range around 1.1610–1.1620 as investors weighed expectations for additional European Central Bank rate increases against continuing Federal Reserve hawkishness ahead of the U.S. Nonfarm Payrolls report.

Traders expected the U.S. economy to add about 85,000 jobs in May, down from April’s 115,000, with the unemployment rate seen holding at 4.3%. Earlier this week, ADP and JOLTS employment measures were stronger while weekly jobless claims rose to 225,000.

Fed funds futures implied roughly a 60% probability of a 25-basis-point rate increase by December 2026 under new Fed Chair Kevin Warsh, reflecting a higher-for-longer policy stance.

On the Eurozone side, first-quarter GDP grew 0.1% quarter-on-quarter and inflation ran near 3.2% year-on-year. Markets priced the ECB deposit rate to about 2.25% next week, narrowing the policy-rate gap with the United States.

Monthly implied policy rate curves for the Eurozone and the U.S. steepened, leaving the Eurozone–U.S. spread for August 2026 at about -1.28%, compared with -1.45% in June and three months earlier.

OANDA senior analyst Kelvin Wong noted the pair has held above a medium-term ascending channel that began on March 13, and that hourly RSI momentum found support and pushed higher. Near-term resistance levels include 1.1645–1.1660, which overlaps the 20-day moving average, 1.1685 at the 200-day moving average and 1.1720 at the 61.8% Fibonacci retracement. Immediate support is near 1.1610, with stronger floors at 1.1580 and 1.1555.

Liquidity and order flow were thin, keeping the pair in a tight range ahead of the payrolls print. Traders will use Friday’s jobs data to reassess expectations for U.S. policy and for short-term direction in the euro-dollar rate.