Forex - EUR/USD little changed near 3-month lows

The euro was little changed close to three-month lows against the dollar on Monday after Friday’s better-than-forecast nonfarm payrolls report fuelled hopes that the U.S. economic recovery is gaining traction.

EUR/USD hit 1.3025 during European afternoon trade, the session high; the pair subsequently consolidated at 1.3002, inching up 0.05%.

The pair was likely to find support at 1.2954, Friday’s low and a three-month low and resistance at 1.3100, the high of March 1.

The U.S. economy added 236,000 jobs last month official data on Friday showed, well above expectations for an increase of 160,000. The unemployment rate ticked down to 7.7%, the lowest level since December 2008, from 7.9% in January.

The robust data added to speculation over an earlier-than-expected end to the Federal Reserve’s easing program, bolstering demand for the dollar.
The single currency remained under pressure following a one-notch downgrade on Italy by ratings agency Fitch in Friday, citing political uncertainty and a deepening recession.

Earlier in the session, official data showed that Germany’s trade surplus narrowed to EUR15.7 billion in January from a revised EUR16.9 billion the previous month. 

German exports rose by a seasonally adjusted 1.4% in January, the biggest increase in five months, while imports rose 3.3%.

Elsewhere, the euro pushed higher against the pound and the yen, withEUR/GBP rising 0.28% to 0.8741 and EUR/JPY rising 0.18% to 125.04.

Sentiment on sterling remained weak as prospects for a triple-dip recession and more easing by the Bank of England continued to weigh.

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