The dollar surged against the majors on the Friday session, rallying sharply against the euro from 1.4412 to 1.4156 and pushing the sterling to 1.6655. The catalyst for the steep move was the closely anticipated July jobs data. In sharp contrast to recent market behavior, the greenback's strength coincided with a rally in the US equity markets. The major bourses were all higher by over 1.6%, with the S&P 500 advancing by 1.75% and the Dow Jones up more than 1.64%.

The July labor report unexpectedly improved for the first time in 15-months with the unemployment rate defying estimates for an increase to 9.7%, instead declining to 9.4% from 9.5% in June. Non-farm payrolls posted a drastic improvement, revealing a loss of 247k jobs, besting calls for a reading of -320k jobs, versus an upwardly revised June reading of 443k jobs lost.

The market action today challenges recent trade correlations, rewarding the greenback on improving sentiment that the US economy will be the first to recovery from the global economic recession. Nonetheless, the economic reports remain inconsistent but reinforce the prospects that the deterioration in fundamentals is slowing. The focus will now be on the two-day FOMC monetary policy meeting next week, with traders closely scrutinizing the Fed's outlook for the economy.

EURUSD trades near 1.4170, with support starting at 1.4140, followed by 1.41 and 1.4060. Subsequent floors are seen at 1.4030 and 1.40. On the topside, resistance will emerge at 1.42, backed by 1.4230 and 1.4260.