Strong US Dollar Weighing on Euro

Euro Lower on MondayEURUSD is testing below the 1.0785 level today for the first time since early December as a strong US Dollar sets the tone for FX markets. The Dollar is rising on the back of a set of bumper US jobs figures on Friday which saw the largest jobs growth in a year last month. With the headline NFP seen topping expectations and rising for a third consecutive month, expectations of a near-term Fed rate cut have been dashed, leading USD higher amidst an uptick in bond yields.ECB Vs FedWhile the ECB has also been quite vocal in pushing back against near-term rate-cut expectations, it seems the emphasis is on the Dollar this week. In terms of US data, the ISM services PMI due later today is the only noteworthy release. While we have little in the way of key US data this week, however, a slew of Fed speakers will draw plenty of focus and offers the potential for fresh volatility in USD. Given a light data sheet in the eurozone also, EURUSD flows this week should remain firmly USD based meaning the pair is likely to stay under pressure while the Dollar remains strong.Technical ViewsEURUSDThe failure at the retest of the broken bull trend line around 1.1126 has seen the market reversing sharply lower. Price is now testing below the 1.0785 level and with bearish momentum studies readings, the focus is on a continuation lower. Interim support at 1.0640 will be the next area to watch ahead of deeper key support at 1.0515.