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EUR/USD has registered impressive gains on Thursday and has gone into a consolidation phase early Friday. The US Bureau of Labor Statistics will release the May jobs report later in the day, which could significantly impact the dollar’s valuation and the pair’s movements ahead of the weekend.

On Thursday, the data published by the ADP revealed that private-sector employment in the US grew at its weakest pace since the beginning of the coronavirus pandemic in May, rising by only 128,000. Commenting on the data, “the job growth rate of hiring has tempered across all industries,” noted  ADP chief economist Nela Richardson. “Small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”

Considering the fact that the dollar came under strong selling pressure after this data suggests that a disappointing Nonfarm Payrolls (NFP) growth in May could trigger a similar market reaction. Investors expect the NFP to rise by 325,000 following April’s increase of 428,000.

It’s worth noting, however, that wage inflation, as measured by the Average Hourly Earnings, is one of the key data points for the Fed when conducting its monetary policy. Strong wage growth could support the greenback even if the NFP falls short of estimates.

Nonfarm Payrolls Preview: It is all about the money, three scenarios for wage growth and the dollar.

The ISM Services PMI will be featured in the US economic docket as well on Friday. Nevertheless, the labour market report should remain the primary market driver.

Meanwhile, US stock index futures trade in negative territory early Friday, pointing to a cautious market mood. If safe-haven flows start dominating the markets in the second half of the day, EUR/USD could find it difficult to continue to push higher and vice versa.

EURUSD Technical Analysis

EUR/USD closes in on 1.0780, the ending point of the uptrend that started mid-May. In case the pair rises above that level, buyers could show interest and lift EUR/USD to 1.0800 (psychological level) and 1.0830 (former support, static level).

On the downside, 1.0720 (50-period and 20-period SMAs on the four-hour chart) forms first support ahead of 1.0700 (psychological level) and 1.0680 (Fibonacci 23.6% retracement).