• US economy expected to add 195K new jobs, but data ahead of the event suggest a softer figure.
  • US set to impose tariffs on $34 billion worth of goods from China, Beijing to retaliate.

The current week is expected to end with a high note, but not because of the release of the monthly US employment report, but because of the US implementation of tariffs on imports from key trade partners, particularly to China. The world's largest economy is set to impose tariffs on $34 billion worth of goods from China this Friday, while Beijing is expected to fighting back with its own $34 billion of tariffs on American goods. Chinese authorities have largely stated that, while they won't be the ones triggering the first shot in this trade war, for sure they won't sit back. Meanwhile, the US announced late June that is also planning to increase tariffs on cars from the EU, with European officers announcing Wednesday that they are considering talks on a tariff-cutting deal between the world's largest car exporters, to prevent an escalation in the trade war. Even central banks have expressed concerns about the risk that protectionism poses to economic growth.

On the other hand, and given the solid health of the US employment sector, the Nonfarm Payroll report to be out this Friday has been losing the capacity to rock the boat. Despite still relevant, the release of US employment data is no longer what it was, triggering limited market reactions unless divergences between the outcome and the expected figures is huge.

The ADP report released this Thursday showed that the private sector added 177K new jobs in June, below the 190K expected, while job cuts rose 18%, from 31,517 in May to 37,202 in June, according to the official release. Also, jobless claims rose to 231K for the week ended June 30, well above the 225K expected, also above an upwardly revised 228K in the previous week. Pretty discouraging news that anticipate a soft Nonfarm Payroll report.

Market players are expecting the US economy to have added 195K new jobs in June, the unemployment rate is seen at record lows of 3.8%, while as usual, wages are barely expected to show signs of life, up monthly basis 0.3% and by 2.8% YoY.

Anyway, the report could have a limited influence on currency pairs, particularly if readings are in-line with market's forecast, with the focus shifting then to risk-sentiment correlated to the trade war.

EUR/USD levels to watch

The EUR/USD pair trades around 1.1700 ahead of the event, with one event-risk pending ahead of the NFP release, the Minutes from the latest FOMC Meeting. Nevertheless, the pair holds at the upper end of its recent range, pressuring a major Fibonacci resistance at 1.1720 with a mild bullish tone in the daily chart, as the price has settled above its 20 DMA, but remains far below the larger ones, with the 100 DMA crossing below the 200 MA in the 1.19/1.20 region. Technical indicators in the mentioned chart are gaining some upward traction after a period of consolidation, leaning the scale toward the upside without confirming it.

An interesting amount of stop are probably gathered above the mentioned Fibonacci resistance, and if triggered, could lead to an advance first toward the 1.1770 region, while beyond this last, up to 1.1855, the next Fibonacci resistance and where the pair topped early June after the ECB and Fed's monetary policy announcements. A key support is the 1.1590/1.1620 region, as below it, the pair has scope to retest the yearly lows in the 1.1500 region.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD rebounds to 1.1350 on modest dollar weakness

EUR/USD regained its traction after declining toward 1.1320 during the European session and rose to 1.1350 area. The dollar's is facing modest selling pressure amid falling US Treasury bond yields and allowing the pair to continue to edge higher ahead of the weekend.


GBP/USD struggles to pull away from 10-day low set near 1.3550

GBP/USD fell toward 1.3550 on Friday and touched its weakest level in 10 days. Although the US Dollar Index stays in the negative territory in the early American session, the risk-averse market environment doesn't allow the pair to stage a convincing recovery.


Gold reclaims $1,840 amid falling US T-bond yields

Gold reversed its direction after testing $1,830 earlier in the day and turned positive on the day above $1,840. The benchmark 10-year US Treasury bond yield is losing more than 3% at 1.75%, fueling XAU/USD's rebound.

Gold News

BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read more

Will the Netflix stock price rebound?

Netflix stock edged down after better than expected Q4 results. Will the Netflix stock price rebound? Expectations of rising subscription and higher prices are bullish for Netflix stock price.

Read more