Disappointing employment data released on Friday sent the dollar higher versus the major currencies as the report from the Labor Department showed a significantly less than expected number of jobs were added to the US economy in the month of January.

Traders were buying dollars as the less than forecasted job numbers did not support expectations of an improving US economy and employment picture. The Bureau of Labor Statistics reported US added 36K new jobs in the month of January. However, economists forecasted payrolls to come in at 138K.

Following Friday's report, the Federal Reserve is expected to complete its $600 billion quantitative easing program. Despite a strong rally in equities this week with the S&P 500 rising 0.29%, traders were rumored to be hesitant of holding risky positions over the weekend with protests continuing in Egypt which may have contributed to the dollar buying as traders took profits on short dollar positions.

While it may be premature to call a top in the euro's recent rally, the failure of the pair to move above the 1.3860 combined with falling momentum point to further declines in the pair. Support will be found at the 1.3540 mark, not far from the 100-day moving average. A natural target for the decline may be 1.3480 which is the 38.2% Fib retracement from this year's bullish move. This level looks to be bolstered as it coincides with the mid-December high. Should the pair continue to fall, the next target would be the 61.8% Fib at 1.3250.