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On the balance of things, the downside bias is still holding but sellers will have to keep below parity to ensure a stronger momentum. In a time when the dollar is still the cleanest shirt among the dirty laundry, it is hard to see the pair move significantly higher – especially since the euro outlook is rather grim heading into the winter months.
The only plausible tailwind for the single currency now is that the ECB may start to move aggressively and frontload rate hikes. A 75 bps move in September is pretty much a given now and they will have to rush to do more before their window to tighten completely closes.
For now, EUR/USD is still hugging the parity level and is yet to find a firm break below that. Sure, price did track lower towards 0.9900 but so far those attempts have been contained as seen below:
There are large expiries today as seen here that could come into play but the key risk to the pair is the US jobs report at 1230 GMT. That will be a major determining factor for dollar sentiment before the long weekend.
As for any potential upside push, there is some decent resistance at 1.0075-90 before the euro is able to come up for air. But in any case if it does, I’d be looking for more shorts again as the path of least resistance remains for a move lower; all else being equal.