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.

    Open Account

Get Free Analytics

* required fields
Last Articles
All Articles
How to Interpret Inflation Data?
The Consumer Price Index, better known as CPI, is an important economic indicator regularly published by major economies to provide timely information on current inflation.
Read more
Setting the Clock Right: The Best Time To Trade Forex In India And Other Tips
In the forex market, many components come together for ensuring smooth operations and positive outcomes for a trader. Careful timing of trades is one of such components. In this article, we will explain how market timing is made, what time is best (and relatively worse) for trading, and how to choose the best time for forex trading in India.
Read more
The Matter of Trends: The Most Trending Forex Pairs
The forex market is lucrative for beginners and experienced traders alike because of high liquidity, various trading options, and earning potential that can be successfully realized with a properly chosen forex pair. Then the first question a trader should ask themselves is what pairs to trade and how to predict trends to make a profit off them. In this article, we will explore the trending potential of forex pairs, how to select the best pairs in forex, and uncover short-term and long-term trends.
Read more