EUR/USD struggles near three-week low, seems vulnerable below 100-day SMA/1.0800

• EUR/USD drops to a multi-week low and is pressured by a combination of factors.
• The upbeat US NFP tempers Fed rate cut bets and continues to underpin the USD.
• Increasing political uncertainty weighs on the Euro and contributes to the decline.

The EUR/USD pair remains under some selling pressure for the second straight day and drops to over a three-week low during the Asian session on Monday. Spot prices currently trade around the 1.0775 region and seem vulnerable to extending the post-NFP breakdown momentum through the 100-day Simple Moving Average (SMA). 

The Labor Department's closely watched monthly employment report showed that the US economy added 272K jobs in May as compared to the 185K anticipated and the previous month's upwardly revised 175K. Adding to this, Average Hourly Earnings surpassed consensus estimates and increased by 4.1% during the 12 months through May, overshadowing an uptick in the jobless rate to 4.0%.

Nevertheless, the data forced investors to scale back their expectations about an imminent rate cut by the Federal Reserve (Fed) in September and kept the US Treasury bond yields elevated. This, along with the cautious mood around the equity markets, is seen underpinning the safe-haven US Dollar (USD) and turning out to be a key factor exerting some downward pressure on the EUR/USD pair. 

The shared currency, on the other hand, is undermined by an aggregated exit poll, which indicated that Eurosceptic nationalists made the biggest gains in European Parliament elections in the Sunday vote. Furthermore, French President Emmanuel Macron's decision to call snap elections later this month increases political uncertainty in the Eurozone's second-biggest economy and favors Euro bears.

This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside, though traders might refrain from placing aggressive directional bets ahead of the crucial FOMC policy decision on Wednesday. Heading into the key central bank event risk, traders will confront the release of the latest US consumer inflation figures, which will drive the USD and provide some meaningful impetus.