EUR/USD traded in a tight range on Friday in thin Good Friday liquidity. The pair was around 1.1534, down for a second day after a one-week high of 1.1627 on Wednesday. The US Dollar gained some support after the March US jobs report, while the Euro stayed fairly steady. The US Dollar Index (DXY) hovered near 100.

Us Jobs Data Supports Dollar

US Nonfarm Payrolls rose by 178K in March, above the 60K forecast. February was revised to a loss of 133K from a previously reported loss of 92K, while the Unemployment Rate fell to 4.3% from 4.4%. Average Hourly Earnings rose 0.2% month-on-month, below the 0.3% forecast and down from 0.4% previously. Earnings increased 3.5% year-on-year, below the 3.7% forecast and down from 3.8%. The latest labour data supports expectations that the Federal Reserve may keep interest rates unchanged for longer. Markets have reduced expectations for rate cuts since the US–Israel war with Iran began, as oil-related inflation risks increased. 2026-04-03T19:53:45.719Z

Fed Outlook And Volatility

We saw a stronger-than-expected US jobs report last month, but the market’s reaction was quiet because of the holiday. The addition of 178,000 jobs confirms the labor market is still solid, giving the Federal Reserve little reason to consider cutting interest rates. This reinforces the view that rates will stay elevated for longer than previously thought. The soft wage growth numbers, however, create some uncertainty and are likely why the dollar did not rally more aggressively. This tension between a strong jobs market and moderating wage inflation suggests we could see sudden price swings as traders return and digest the mixed signals. With the CBOE Volatility Index (VIX) recently climbing back above 17, we should prepare for an increase in currency market volatility. Given the ongoing geopolitical conflict and its effect on oil prices, which are holding firm around $95 per barrel for Brent crude, inflation remains the primary concern for the Fed. Recent US inflation data from February 2026 showed core CPI still hovering at 3.7%, well above the Fed’s target. This backdrop makes it very difficult to bet against the US dollar in the near term. This situation feels similar to what we experienced back in 2022, when stubborn inflation forced the Fed into an aggressive hiking cycle, causing the US Dollar Index to surge past 110. While we are not expecting that level of aggression, it shows how a hawkish Fed can create sustained dollar strength. The current DXY level near 100 is a critical pivot point that could serve as a base for another move higher. On the other side, the Euro is holding its ground partly because the European Central Bank is also facing persistent inflation, with the latest Harmonised Index of Consumer Prices for the Eurozone at 3.5%. This prevents the ECB from becoming too dovish, creating a floor for the EUR/USD pair for now. The pair remaining in a tight range around 1.1550 despite the US data shows this balance of forces. For derivative traders, this suggests that selling upside volatility in EUR/USD could be a prudent strategy. Selling out-of-the-money call options or establishing bearish risk reversals would allow us to profit if the pair remains range-bound or drifts lower. These positions offer a way to capitalize on the view that any significant upward moves in EUR/USD are unlikely in the coming weeks. Create your live VT Markets account and start trading now.

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