Continuing with the EURUSD currency pair, last week saw another attempt by the common currency to extend the gains.

The euro managed to touch weekly highs of 1.2522 but gave up the gains, just a few pips shy from touch the previously established highs at 1.2537.

With the currency pair seen pulling back, the bias remains to the downside as we expect to see a correction.

The EURUSD has managed to breakout above the resistance level that we identified at 1.2325 – 1.2231 level. However, failure to hold on to gains above this level could indicate weakness in the currency pair.

The declines could especially accelerate if the EURUSD extends the gains below 1.2231. This could see prices falling to the initial support level near 1.2090 – 1.2030 level.

Last week’s gains in the euro came from the GDP data that showed that the Eurozone’s economy advanced stronger than expected.

Later in the week however, the flash inflation estimates showed that consumer prices were mixed.

While headline inflation increased at a weaker pace, core CPI managed to rise back from 0.9% registered in the previous month.

The U.S. dollar however received some support from the FOMC meeting which was more hawkish than expected.

Fed officials are hopeful for three rate hikes this year but the consensus could be for at least four rate hikes this year.

On Friday, the non-farm payrolls report came out stronger than expected.

The U.S. unemployment rate held steady at 4.1% while the U.S. economy added 200,000 jobs during the month on a seasonally adjusted basis.

The biggest gains came from wage growth which accelerated 2.9% on the year.

The better than expected data is likely to put a dent on the euro’s gains for the moment. However, watch for a break down below 1.2231 for this view to be validated.