Euro is trading low against the greenback in the Monday Asian session. The softer-than-expected US Nonfarm Payrolls (NFP) and the worsening of the Eurozone’s investor sentiment underpinned this move.

The Unemployment rate dropped lower than the expectation of 4.7% to 4.2% this data helped the greenback. However US NFP disappointed labor market optimists with 210K figures, versus 550K expected, Further, Average Hourly Earnings matched the 4.8% YoY forecast. Before the release of the data, St Louis Fed President James Bullard who is also a voting member in 2022 said, “Could look at raising interest rates before completing the taper.”

On the other hand, Eurozone’s investor sentiment keeps worsening in the final month of the year, the latest data published by the Sentix research group showed on Monday. The gauge fell further to 13.5 in December from 18.3 in November vs. a reading of 15.9 expected. The index reached the lowest levels since April.

A current conditions index fell for the third month in a row to 13.3 from 23.5 in November, dropping to its lowest since May. However, an expectations index rose to 13.8 from 13.3 in the previous month.

Sentix Managing Director Manfred Huebner said: “A slowdown and even a recession no longer seem to be ruled out now. These lockdowns hit the economy harder than before.”

Whereas, the European Central Bank (ECB) policymakers believe that the inflation fears are temporary and highlight the pandemic to defend the easy money policies.

Talking about the Omicron variant, At the start of the week, it was reported that ”initial data from a major hospital complex in South Africa’s omicron epicentre show that while Covid case numbers have surged, patients need less medical intervention.” 

Meanwhile, Omicron has now been detected in at least 24 countries around the world, according to the World Health Organization (WHO). While Omicron has spread to about one-third of US states as of Sunday, Dr. Anthony Fauci, the top US infectious disease official, told CNN that “thus far it does not look like there’s a great degree of severity to it,” though he cautioned that it’s too early to be certain.

There is no major market-moving economic data due for release from the US on Monday, leaving the USD to be dependent on the bond yield to find the trade direction.

EUR/USD 4 Hour Chart:

Support: 1.1275 (S1), 1.1237 (S2), 1.1208 (S3).

Resistance: 1.342 (R1), 1.1371 (R2), 1.1409 (R3).

In the prevailing trading sentiment which favors the greenback over the Euro, we expect a bearish trend for the EUR/USD.