US Labor Market Report Is in the Spotlight

Trading activity and volatility on currency majors have grown significantly. At the moment, the dollar index (#DX) is consolidating (98.40-100.00). The COVID-19 virus epidemic continues to impact financial markets negatively. World Central Banks have taken emergency measures to stimulate the economy. Most countries have imposed severe restrictions on the control of coronavirus. The "black gold" prices have fallen to multi-year lows. The US stock market continues to show a sharp decline.

dx-2020-04-02
Source: finviz.com

At the moment, financial market participants have taken a wait-and-see attitude before the publication of the US labor market report for March, on Friday, April 3. These statistics may have a significant impact on the dynamics of currency majors.

The US Department of Labor reported that the number of initial jobless claims reached a record high and exceeded 3 million. Other economic releases were also pessimistic. According to ADP, the number of people employed in the nonfarm sector of the country decreased by 27K. The consumer confidence index slowed down from 132.6 to 120.0. ISM manufacturing PMI counted to 49.1 compared with a previous value of 50.1.

us-non-farm-2020-04-02
Source: tradingeconomics.com

Experts expect a deterioration in key indicators of the labor market: the number of people employed in the US nonfarm sector will decrease by 100K; average hourly earnings will slow down from 0.3% (m/m) to 0.2% (m/m); the unemployment rate will be 3.8% in comparison to the previous value of 3.5%. We recommend paying attention to the difference between the actual and forecasted values.

Let’s consider the current technical pattern on the EUR/USD currency pair

  • Support Levels: 1.0910, 1.0845, 1.0755
  • Resistance Levels: 1.0980, 1.1035, 1.1085
  • mn-eurusd-2020-04-02

    At the moment, the EUR/USD currency pair is stable. A trading instrument is consolidating. The local support and resistance levels are 1.0910 and 1.0980, respectively. Indicators do not give accurate signals:

    • - The price has crossed 100 MA;
    • - The MACD histogram is in the negative zone, which indicates the bearish sentiment.

    We recommend opening positions from key levels.

    If statistics from the US turns out to be weak, we expect growth of EUR/USD quotes. The movement is tending to 1.1050-1.1100.

    An alternative may be a decrease in the EUR/USD currency pair to 1.0845-1.0800.

    When following positions, we recommend using a trailing stop.

    by JustForex, 2020.04.03

    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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