We Expect Labor Statistics From the US

Since the beginning of this month, the US dollar has shown positive dynamics against currency majors. The dollar index (#DX) moved away from local lows and approached the level of 97.00. The trade conflict between Washington and Beijing has gone into the background. Financial market participants assess the risks of geopolitical instability in the Middle East. Last week, US President Donald Trump ordered the airstrike in Baghdad. As a result, Iranian General Qasem Soleimani was killed, that caused tensions between the countries. On Monday, US Secretary of Defense Mark Esper said the United States had not planned to withdraw troops from Iraq. On Wednesday, Iran carried a series of missiles strikes at two US air bases in Iraq. We recommend following current information on this issue.

dx-2020-01-09
Source: finviz.com

At the moment, investors have taken a wait-and-see attitude before the publication of labor statistics in the US for December on Friday, January 10, at 15:30 (GMT+2:00). This report may have a significant impact on the dynamics and further alignment of forces on the currency majors.

Recent economic releases from the United States were ambiguous. The ISM manufacturing PMI slowed down from 48.1 to 47.2. The consumer confidence index counted to 126.5 compared to market expectations at 128.2. At the same time, preliminary data from ADP indicated an increase in the number of people employed in the nonfarm sector of the country by 202K, which is higher than the forecasted value of 160K. The ISM non-manufacturing PMI accelerated to 55.0 from 53.9.

non-farm-2020-01-09
Source: tradingeconomics.com

Experts expect mixed data on the labor market for December: the number of people employed in the US nonfarm sector will slow down from 266,000 to 164,000; the growth of the average hourly earnings will be 0.3% (m/m) in comparison to the previous value of 0.2% (m/m); the unemployment rate will remain unchanged at 3.5%. 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: 1.11000, 1.10700, 1.10500
  • Resistance Levels: 1.11300, 1.11600, 1.11750
  • market-news-2020-01-09

    The EUR/USD currency pair has become stable. A trading instrument is consolidating. At the moment, the following local support and resistance levels can be distinguished: 1.11000 and 1.11300, respectively. Indicators point to the power of sellers:

    • - The price has fixed below 50 MA and 100 MA;
    • - The MACD histogram is in the negative zone.

    Nevertheless, we recommend opening positions from key levels.

    If the report on the US labor market turns out to be weak, we expect EUR/USD quotes to recover. The movement is tending to 1.11600-1.11750.

    An alternative could be a decrease in the EUR/USD currency pair to 1.10700-1.10500.

    When tracking positions, we recommend using a trailing stop.

    by JustForex, 2020.01.10

    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.

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