US Labor Market Report Is in the Focus of Attention

Since the beginning of this week, the US dollar has been showing positive dynamics relative to the basket of world currencies. The dollar index (#DX) reached three-month highs. Last week, the Fed, as expected, kept the key interest rate range at the previous level of 1.50% -1.75%. Further monetary policy adjustment of the regulator will depend on future economic releases. An outbreak of coronavirus from China is still in the focus of investors’ attention. At the same time, concerns about the further spread of the epidemic have declined, that improved sentiment in the financial markets. World stock indexes moved away from local lows and closed in the green zone. Oil quotes have been growing after a prolonged fall.

dx-2020-02-06
Source: finviz.com

Currently, investors have taken a wait-and-see attitude before the publication of the US labor market report for January, on Friday, February 7. These statistics may affect the Fed's views on further monetary policy adjustments.

Recent reports from the US were optimistic. Preliminary data from ADP indicated an increase in the number of people employed in the nonfarm sector of the country by 291K, which is higher than the forecasted value of 156K. The consumer confidence index rose to 131.6 compared to market expectations of 128.0. ISM non-manufacturing PMI accelerated from 54.9 to 55.5.

non-farm-2020-02-06
Source: tradingeconomics.com

Experts expect improvements in key indicators of the labor market: the number of people employed in the US nonfarm sector will accelerate to 160K from 145K; the growth in average hourly earnings will be 0.3% (m/m) in comparison to the previous value of 0.1% (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: 1.0990, 1.0950
  • Resistance Levels: 1.1020, 1.1040, 1.1065
  • market-news-eurusd-2020-02-06

    The EUR/USD currency pair has become stable after a prolonged fall. The trading instrument has reached key lows. Currently, EUR/USD quotes are consolidating. The local support and resistance levels are 1.0990 and 1.1020, respectively. The single currency has the potential to further decline. Indicators signal 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 statistics from the US turn out to be positive, we expect a further drop in the EUR/USD quotes. The movement is tending to 1.0950-1.0900.

    An alternative may be the recovery of the EUR/USD currency pair to 1.1050-1.1090.

    When tracking positions, we recommend using a trailing stop.

    by JustForex, 2020.02.07

    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

Get Free Analytics

* required fields
Last Articles
All Articles
Full Guide to Forex Trading in South Africa
Forex trading is a popular form of short-time investment and a source of additional or main income for many people all over the world. Forex trading is available in South Africa, but many potential traders just do not know how to make the first steps in this field. This full beginner’s guide explains the base of Forex and its key terms.
Read more
How to Learn Forex Trading for Beginners in 2022
We want to present a guide for beginner Forex traders that will give the main ideas on how to start Forex trading in the most effective way and how to earn on purchasing and selling currencies. Professional traders have designed the Forex trader tutorial whose extensive experience helped optimize its structure and content. It offers all the necessary information to start your trading journey in 2022.
Read more
Social Trading vs. Copy Trading
The Forex market is full of complex terms and definitions that look like a total mess for a novice. There is no surprise that some traders do not see the difference between copy trading and social trading. This article explains the difference, discusses pros and contras, and the best platforms for these types of trading.
Read more