The dollar posted strong gains on Friday that extended into early trading on Monday on news that far more hiring took place in February than expected, which stoked talk the Federal Reserve will soon wind down stimulus programs.
In U.S. trading on Monday, EUR/USD was up 0.13% at 1.3014, up from a session low of 1.2979 and off from a high of 1.3025.
The pair was likely to find support at 1.2956, Friday's low, and resistance at 1.3134, Friday's high.
The Bureau of Labor Statistics reported on Friday that the U.S. economy added 236,000 nonfarm payrolls in February, way more than an expected 160,000 increase and up above 119,000 reported in January.
The U.S. private sector added 246,000 jobs, beating expectations for a 167,000 increase, following January's 140,000 rise.
The headline unemployment rate fell to 7.7% in February from 7.9% in January, beating analysts' calls for the rate to remain unchanged.
The numbers fueled heavy demand for dollars on growing sentiment that the Federal Reserve will soon consider wrapping up stimulus programs designed to create job demand by flooding the economy with liquidity to encourage investing.
The Fed is currently running a USD85 billion monthly bond-buying program known as quantitative easing, which weakens the dollar as a side effect, and Friday's jobs report and other solid economic indicators continued to pump up expectations that such programs may wrap up sooner rather than later.
By mid-session trading on Monday, however, investors sold the greenback for profits, which gave the single currency room to rise.
The euro also continued to recover from a one-notch downgrade slapped on Italy by the Fitch ratings agency on Friday amid concerns that political uncertainty and recession may delay recovery.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.13% at 0.8728, and EUR/JPY trading up 0.19% at
125.06.
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