Euro trying to reach 1.09

The EUR/USD pair is gathering strength to recapture the round-level resistance of 1.0900 in the early European session. The major currency pair has picked up strength as the US Dollar Index (DXY) is facing immense pressure despite overwhelming chances of 25 basis points (bps) interest rate hike in July by the US Federal Reserve (Fed).

The S&P500 futures are extending their losses in the Asian session and US equities are also facing immense selling pressure on the back of better-than-anticipated employment numbers in June propelled hopes of more interest rate hikes from the Fed.

The US Dollar Index (DXY) has extended its correction to near 103.05 despite fears of further policy-tightening from the \fed and the US labour market is not in the mood to release some heat in spite of higher interest rates and tight credit conditions by the commercial banks.

Going forward, traders will focus on the US Nonfarm Payrolls (NFP) data and analysts predict that the US labour market added 225K new jobs versus the previous months figure of 339K. The Unemployment Rate is expected to drop to 3.6% against the prior release of 3.7%.

On the Eurozone front, German monthly Industrial Production has contracted by 0.2% while analysts were anticipating a mild expansion of 0.1%. On Thursday, German Factory Orders were upbeat, which indicates that the manufacturing sector could recover ahead.

Meanwhile, hopes for more interest rates from European Central Bank (ECB) President Christine Lagarde are strengthening as inflationary pressures in the old continent are still stubborn.