Bearish view
Sell the EUR/USD pair and set a take-profit at 1.1325.
Add a stop-loss at 1.1500.
Timeline: 1-2 days.
Bullish view
Buy the EUR/USD pair and set a take-profit at 1.1500.
Add a stop-loss at 1.1325.
The EUR/USD exchange rate was flat on Wednesday morning as traders reacted to the relatively strong macro data from the United States. It was trading at 1.1420, a few points above last month’s low of 1.1325, with traders waiting for key ECB and Fed statements and US non-farm payrolls (NFP) data.
US NFP Data and Kevin Warsh Statement
The EUR/USD pair wavered after the US published some encouraging macro data. According to the Bureau of Labor Statistics (BLS), the US economy had 7.6 million job openings in May, an increase from the 7.58 million it had a month earlier.
These numbers confirm that the labor market is doing relatively well this year. Economists expect the upcoming private payrolls report to show that the employers added over 118k jobs in June after creating 122k in the previous month.
The Bureau of Labor Statistics (BLS) will next release the official jobs numbers on Thursday. This report will come a day earlier because Friday will be a holiday in the United States. The estimate is that the unemployment rate will remain unchanged at 4.3% as the economy created over 120k jobs.
These numbers come at a time when economists are debating on whether the bank should hike or cut interest rates this month. Some analysts believe that the bank should cut to boost the economy, while others predict that the bank will hike rates later this year since inflation has remained above the 2% target for over five years.
Kevin Warsh, the new Federal Reserve Chair, will likely provide hints on what to expect later today when he speaks at the ECB forum in Portugal. Christine Lagarde, the head of the ECB, will talk hours after Eurostat has published the latest consumer inflation report. The general view is that European consumer inflation softened a bit last month.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair has held steady in the past few days. It retested the important level of 1.1415, a notable level as this was the lowest level in March this year. This break-and-retest pattern is one of the most common continuation sign in technical analysis.
The pair has remained below the 50-day moving average and the ultimate support level of the Murrey Math Lines tool at 1.1475. Therefore, the pair will likely continue falling, potentially to last month’s low of 1.1325. A move below that level will point to further downside to 1.1300.
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