Investing.com -- EUR/USD inched up on Monday, barely extending a 7-day winning streak, as unemployment in the euro area fell slightly in February to hit its lowest level in more than four years.
The currency pair traded in a tight range between 1.1357 and 1.1412, before settling at 1.1391, up 0.0002 or 0.02% on the session. With the slight gains, the euro remained near five-month highs versus the dollar. The euro is coming off its strongest quarter against the dollar since the first quarter of 2011, after surging by more than 4.75% versus its American counterpart in the opening three months of the year.
EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1496, the high from Oct. 15.
On Monday, EUR/USD rose to session-highs after Eurostat reported that monthly unemployment in the euro zone inched down 0.1 to a seasonally-adjusted 10.3% in February, its lowest level since August, 2011. The reading fell in line with consensus estimates. More encouragingly, the unemployment rate in the EU 28 remained at 8.9%, down 0.8% from its level 12 months ago. Unemployment among the 28-nation bloc is at its lowest level since May, 2009.
Elsewhere, investors continued to digest an optimistic March U.S. jobs report from the end of last week, which provided broad signals of improved labor market conditions nationwide. For the month, U.S. nonfarm payrolls rose by 215,000 in March, eclipsing consensus estimates of 210,000 and building on an upwardly revised 245,000 figure a month earlier. In addition, average hourly earnings jumped by 0.3% for the month, while the labor force participation rate also increased by 0.1 to 63%. Although the employment rate inched up by 0.1 to 5.0%, it still remains near eight-year lows from the previous two months.
The report came in the wake of dovish indications from Fed chair Janet Yellen that the U.S. central bank will express caution in approving further rate hikes against a backdrop of heightened global economic and financial risks. A wave of Federal Open Market Committee (FOMC) policymakers, including Yellen are scheduled to speak later this week. On Monday, however, Boston Fed president Eric Rosengren said he expects the Fed to resume a path of gradual tightening "sooner than implied by financial market futures," if the economy continues to exhibit moderate recovery."
Any rate hikes by the Fed this year are viewed as bullish for the dollar, as foreign investors pile into the greenback in an effort to capitalize on higher yields.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained 0.01 on Monday to settle at 94.59. The index still remains near five-month lows.
Yields on the U.S. 10-Year fell one basis point to 1.76%, while yields on the Germany 10-Year were flat at 0.13%. Government bond yields on U.S. 10-year Treasuries remained near five-week lows.