US Labor Market Report Is in the Spotlight

The US dollar shows a downtrend against a basket of world currencies. The dollar index (#DX) has updated two-year lows. The greenback is under pressure due to weak economic releases, as well as the negative dynamics of government bond yields. In the second quarter, the country's economy decreased by 32.9%, which is the biggest collapse in history. Investors are also concerned about the fact that US lawmakers couldn't agree on a new stimulus package. The coronavirus pandemic is still in the spotlight. The number of infected in the world has exceeded 18.7 million.

dx-2020-08-06
Source: finviz.com

At the moment, investors have taken a wait-and-see attitude before the publication of the report on the US labor market for July, on Friday, August 07. These statistics may have an impact on the further alignment of forces on currency majors.

Recent reports from the US were ambiguous. Preliminary data from ADP indicated a slowdown in the number of people employed in the nonfarm sector of the country to 167K, which is below the forecasted value at the level of 1500K. The consumer confidence index fell from 98.3 to 92.6. At the same time, ISM non-manufacturing PMI rose to 58.1 from 57.1.

non-farm-2020-08-06
Source: tradingeconomics.com

Experts expect a rather pessimistic report on the labor market: the number of people employed in the US nonfarm sector will slow down to 1600K; average hourly earnings will decrease by 0.5% (m/m); the unemployment rate will slightly fell from 11.1% to 10.5%. 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: 1.1800, 1.1700, 1.1620
  • Resistance levels: 1.1900
  • mn-2020-08-06

    The EUR/USD currency pair has become stable after a prolonged growth. At the moment, the trading instrument is consolidating. Local support and resistance levels are 1.1800 and 1.1900, respectively. Indicators signal the power of buyers:

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

    Nevertheless, we recommend opening positions from key levels.

    If the price fixes above 1.1900, we expect further growth in EUR/USD quotes. The movement is tending to the round level of 1.1950-1.2000.

    An alternative could be the decline in the EUR/USD currency pair to 1.1700-1.1600.

    When following positions, we recommend using a trailing stop.

    by JustForex, 2020.08.07

    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.

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