Forex - Euro moves higher as dollar takes a breather

The euro moved higher against the dollar on Monday as the dollar took a breather in the wake of a broad based rally late last week on the back of stronger-than-expected U.S. jobs data for October.

EUR/USD was up 0.23% to 1.3392 from Friday’s close of 1.3364 during European afternoon trade, moving further back from Thursday’s seven week low of 1.3294.

The pair was likely to find support at 1.3316, Friday’s low and resistance at 1.3437, Friday’s high.

The dollar remained supported after official data on Friday showed that the U.S. economy added 204,000 jobs in October, significantly higher than the 125,000 expected by economists. 

The report came on the heels of data showing that the U.S. economy expanded by a larger-than-forecast 2.8% in the third quarter.

The upbeat data indicated that the U.S. economy shrugged off the impact of the government shutdown and raised the possibility that the Federal Reserve may start winding down its USD85 billion-a-month asset purchase program as soon as its next monthly meeting in December.

The single currency’s gains were held in check after the European Central Bank unexpectedly cut bank rates to 0.25% from 0.5% on Thursday and indicated that further rate cuts are still possible.

The euro pushed higher against the yen, with EUR/JPY up 0.33% to 132.84. 

Elsewhere, the dollar remained supported close to Thursday’s seven week high of 99.40, with USD/JPY easing up 0.11% to 99.18, from Friday’s close of 99.05.