Euro pressured below 1.10

The EUR/USD pair struggles to gain and remains on the defensive below the 1.1000 barrier heading into the early European session. Markets turn cautious ahead of top-tier economic data from the US. The major pair currently trades around 1.0945, down 0.02% for the day. 

The European Central Bank raised interest rates by 25 basis points (bps) to 4.25% last week. ECB President Christine Lagarde stated that the central bank will move towards achieving a medium-term inflation target of 2%. Additionally, ECB board member Fabio Panetta supported higher interest rates for longer and added that Inflation risks are balanced and economic activity is weak.

The latest data from the Deutsche Bundesbank showed that Germany's Factory Orders rose 3.0% YoY compared to -4.4% prior, while the monthly figure increase was 7.0% compared to 6.2% previously and -2.0% market expectations.

Additionally, the Eurozone Producer Price Index (PPI) for June fell to its lowest level in three years on Thursday. The figure dropped -3.4% YoY vs -3.1% expected and -1.6% prior. The bloc's HCOB Composite PMI fell from 48.9 to 48.6. While the services PMI for July declined from 51.1 to 50.9.

On the US Dollar front, the data released by the US on Thursday revealed that Initial Jobless Claims rose to 227,000 for the week ending July 29. The Unit Labour Costs Q2 increased by 1.6%, below the anticipated 2.6%, and Q1 was revised from 4.2% to 3.2%. In June, Factory Orders rose by 2.3%, as expected. The ISM Services PMI decreased from 53.9 to 52.7, below the market consensus of 53.

However, traders will also take cues from the US wage inflation and employment release on Friday. The upbeat data could convince the Federal Reserve (Fed) to hike additional rates for the entire year. This, in turn, benefits the Greenback and acts as a headwind for EUR/USD

Moving on, market participants will focus on the top-tier data due later in the American session. The US Nonfarm Payrolls are expected to create 180,000 jobs in July. Also, the Unemployment Rate and Average Hourly Earnings will be released on Friday. The Unemployment Rate is expected to remain at 3.6%, and Average Hourly Earnings YoY are expected to increase by 4.2%.