Forexpros – The euro traded sharply higher against the U.S. dollar Friday, as surprisingly positive euro zone retail sales data while investors await the heavily anticipated U.S. nonfarm payroll data later in the session.
EUR/USD hit 1.2288 during the session, spiking higher by 0.88% after rallying from a low of 1.2167.
The pair was likely to find support at 1.2054, the low of July 25 and resistance at 1.2330, the high of July 31.
Lifting the single currency, government data indicated retail sales in the euro zone rose 0.1% in June, beating expectations for a 0.1% decline and following a 0.8% rise the previous month.
However, the euro’s gains were limited after European Central Bank President Mario Draghi stated the bank may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
Draghi also said that any such action by the ECB was conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
The ECB also left interest rates unchanged at a record low 0.75%.
Meanwhile, investors were anxiously anticipating the release of U.S. nonfarm payrolls, as the results could give more indications on whether or not the Federal Reserve will need to add stimulus to shore up growth, after the central bank refrained from implementing fresh easing measures on Wednesday.
The euro was also higher against the pound with EUR/GBP adding 0.37%, to hit 0.7880.
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