#EURUSD @ 1.07731 looks unable to pick up some upside traction.

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• EUR/USD looks unable to pick up some upside traction.
• The greenback remains bid post-Payrolls north of 103.00.
• EMU Sentix Index comes next in the domestic docket.

The selling pressure around the single currency remains well and sound and drags EUR/USD to new multi-session lows near 1.0770 at the beginning of the week.

The pair starts the week on the back foot and retreats further south of the 1.0800 support on Monday, as investors continue to digest the solid prints from the January Payrolls published last Friday.

Indeed, those better-than-estimated results from the US labour market lend further legs to the view that the Federal Reserve might move further into the restrictive territory, which in turn supports the dollar and the recent rebound in US yields.

The pair, in the meantime, drops for the third session in a row and gives away more than 2 cents since last week’s tops around the 1.1030 region.

Data wise in the euro area, Factory Orders in Germany expanded more than expected 3.2% MoM in December, while the Construction PMI improved to 43.3 in January and New Car Registrations contracted 2.6% over the last twelve months. In the broader Euroland, the Construction PMI rose to 46.1 during last month, while the Sentix Index, Retail Sales and the speech by Chair Lagarde are due next.

The pronounced sell-off post-US NFP appears somewhat mitigated on Monday, although the selling pressure around the euro remains in place for the time being.

In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB after the central bank delivered a 50 bps at its meeting last week.

Back to the euro area, recession concerns now appear to have dwindled, which at the same time remain an important driver sustaining the ongoing recovery in the single currency as well as the hawkish narrative from the ECB.

Key events in the euro area this week: Germany Factory Orders/Construction PMI, EMU Retail Sales/Sentix Index, ECB Lagarde (Monday) – Germany Flash Inflation Rate (Thursday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle amidst dwindling bets for a recession in the region and still elevated inflation. Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.

So far, the pair is retreating 0.18% at 1.0773 and the breakdown of 1.0769 (weekly low February 6) would target 1.0766 (weekly low January 17) en route to 1.0656 (55-day SMA). On the flip side, the next up barrier emerges at 1.1032 (2023 high February 2) followed by 1.1100 (round level) and finally 1.1184 (weekly low March 31 2022).

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