Since the beginning of this week, the US dollar has shown negative dynamics against the basket of world currencies. The dollar index (#DX) moved away from annual highs. Financial market participants are concerned about the impact of the trade conflict between Washington and Beijing on the state of the global economy. Growing risks of the "hard" Brexit, as well as the dispute concerning the impeachment of US President Donald Trump, put additional pressure.
At the moment, investors have taken a wait-and-see attitude before the publication of labor statistics in the US for September on Friday, October 4, at 15:30 (GMT+3:00). This report may have a significant impact on the dynamics and further alignment of forces on currency majors.
Recent economic releases from the US were pessimistic. Manufacturing activity in the country decreased at the fastest pace in the last 10 years. Preliminary data from ADP indicated a decrease in the number of people employed in the country's nonfarm sector by 135K compared to market expectations at 140K. The consumer confidence index fell from 134.2 to 125.1. The ISM non-manufacturing PMI slowed down from 56.4 to 52.6.
Experts expect mixed data on the labor market for September: the number of people employed in the US nonfarm sector will accelerate from 130,000 to 145,000; the growth of the average hourly earnings will be 0.3% (m/m) in comparison to the previous value of 0.4% (m/m); the unemployment rate will remain unchanged at 3.7%. We recommend paying attention to the difference between the actual and forecasted values of the indicators.
Let's consider the current technical pattern on the EUR/USD currency pair
- Support levels: 1.09300, 1.08850, 1.08500
- Resistance levels: 1.09750, 1.10250, 1.10700
- - The price has crossed 50 MA;
- - The MACD histogram has moved into the positive zone, which signals the development of bullish sentiment.
At the moment, the EUR/USD currency pair is consolidating. The technical pattern is ambiguous. The trading instrument is testing local support and resistance levels: 1.09300 and 1.09750, respectively. Indicators do not give accurate signals:
We recommend opening positions from the key levels.
If the report on the US labor market turns out to be weak, we expect a recovery of the EUR/USD quotes. The immediate goal for profit taking is 1.10250. The movement is tending to 1.10700-1.11000.
An alternative could be a decrease in the EUR/USD currency pair to 1.09000-1.08500.
Confirmations and market entry points should be looked for on lower timeframes. When tracking positions, we recommend using a trailing stop.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.Open Account