The Report on the US Labor Market Will Determine the Financial Markets Sentiments

Yesterday, the US dollar recouped some of the losses after a significant drop since the beginning of this week. Demand for the US currency rose after the Fed's meeting. The Central Bank, as expected, kept the range of the key interest rate at the previous level of 1.25%-1.50%. The regulator noted positive changes in the US economy and raised expectations about the growth of inflation. At the moment, participants of the financial markets took a wait-and-see attitude. Today, the report on the labor market in the USA will be published at 15:30 (GMT+2:00).

Experts expect that in January 180,000 new jobs will be created in the non-agricultural sector of the country after a slowdown in December to 146,000. At the same time, the preliminary data indicate that statistics can be ambiguous. According to ADP, the growth in the number of people employed in the private sector has slowed slightly. The total number of people receiving jobless claims increased by 13 thousand to 1.953 million. The index of ISM manufacturing employment in the US fell to 59.1 from 59.7.

We recommend paying attention to the unemployment level and the wage growth. At the moment, the unemployment rate in the US is at 4.1% (17-year minimum). Economists note that the average hourly wage is growing at a fairly low rate. These events enhance investors' concerns about the risk of the economy "overheating". It is necessary to pay attention to the difference between the forecasted values and the true-to-fact ones.

US Unemployment Rate
Source: tradingeconomics.com
The analysis of the CME exchange data (Chicago Mercantile Exchange) allowed to distinguish the option levels of the major players' interest for January 05 – February 09:
  • The resistance zone – 1.2250-1.2350
  • The support zone – 1.1950-1.2050
  • The option balance level – 1.2150
EUR/USD Pattern

At the moment the EUR/USD quotes have fixed above the monthly control zone of 1.2250-1.2350, which indicates the power of the buyers. Nevertheless, a technical correction is possible in the near future. The key trading range is 1.24500-1.25250. We recommend you to open positions below/above these levels. If the report on the labor market is optimistic, the EUR/USD currency pair may turn back to the monthly control zone range of 1.2250-1.2350.

by JustForex, 2018.02.02

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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