EUR/USD corrects to near 1.0230 after displaying exhaustion signals, US NFP in focus
|- EUR/USD has been dragged to near 1.0230 as DXY is picking bids ahead of the US NFP.
- US job market will increase at a diminishing rate as employment levels have reached their full capacity.
- The downbeat Retail Sales and German Factory Orders indicate a slowdown in Eurozone ahead.
The EUR/USD pair has given a downside break of the inventory distribution formed in a narrow range of 1.0243-1.0254 in early Tokyo and has corrected to near 1.0230. The major is displaying exhaustion in the upside momentum and is likely to extend its correction as the US dollar index (DXY) has attempted a rebound after printing a low of 105.70 on Thursday.
As per the market consensus, the additional jobs created in the month of July may trim to 250k against the prior release of 372k. No doubt, rising interest rates have compelled the US corporate players to invest with such precautions. Costly dollars have forced them to move further with the safest investments only. Therefore, a slump in job creation was highly expected.
In spite of that, the DXY is performing well ahead of the labor market data. As investors are aware of the fact that the US economy is maintaining full employment levels consecutively for the past six months. Therefore, room for more employment generation is less and an increment in jobs with a decreasing rate should be welcomed by the market participants.
On the eurozone front, a slump in the overall demand is becoming a major concern for the shared currency bulls. Earlier, the Retail Sales data landed at -3.7%, lower than the expectations of -1.7% and the prior release of 0.4%. In times, when price pressures are sky-rocketing, the Retail Sales data should have reported an uptick, however, a slump in the same indicates that the overall demand is extremely poor.
Now, the downbeat German Factory Orders data has bolstered the slowdown claims. The economic data has squeezed by 0.4% vs. the expectation of a squeeze by 0.8% and the prior squeeze of 0.2% on a monthly basis.
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