US October employment data is due this Friday, after plenty of first-tier events that so far represented nothing in terms of price action when it comes to the EUR/USD pair. The FOMC monetary policy meeting that took place earlier this week was a non-event, providing no changes to what the market now foresees: a rate hike in December and at least one more for 2018. Policymakers referred to a "solid" economy and acknowledged inflation remains soft. Could then the Nonfarm Payroll report be a game changer? Clearly not, because the problem is and has always been inflation, not employment.

The Dollar is strong and near multi-month highs against most of its major rivals, despite the previous Nonfarm Payroll report was disastrous, with the economy losing 33,000 job's position in September. The hurricanes that hit the country during the month lessened the effect of the awful number in the FX board. That said, the immediate reaction to the report is no longer a trend-setter as it was many years ago.

Still, the report will bring some intraday action, which is expected to be more relevant if it is Dollar's positive, as it will be aligned with market's sentiment/the dominant trend.

The US economy is expected to have added 312K new jobs in October, a stark contrast to the previously mentioned decline. The unemployment rate is seen unchanged at 4.2%, a multi-decade low, while average hourly earnings, also a positive surprise last month that partially offset the negative headline, are seen growing by 0.3% monthly basis, against previous 0.5%. Wages grew by 2.9% yearly basis, close to the 3-4% range that the Fed sees as "healthy".

The ADP survey released last Wednesday suggests that the upcoming numbers will be strong, as according to it, the private sector added 235K new jobs in October, largely above a previous revised to 110K or the expected 200K.

Anyway, a reading above the expected 312K seems unlikely as it's too high, but anything above 240K should be considered dollar positive. Wages, as usual, will be key as a decline there will probably hit the greenback, as wages are correlated to consumption and therefore inflation.

EUR/USD levels to watch

Ever since the week started, the pair has been confined to a tight range below the 38.2% retracement of the latest daily decline, now challenging it as Wall Street plunges, after the GOP unveiled its tax-reform plan. The bill is mostly positive for equities, as seems the corporate rate will be chopped straight to 20% with no phases in between. The decline seems mostly due to the market not believing it could happen.

Anyway, from current levels, the pair has a relevant resistance around 1.1740, the 61.8% retracement of the latest decline. That's where the pair has its 20 DMA on the daily chart. Indicators in the mentioned chart have recovered from oversold levels, but remain within negative territory, suggesting the pair could extend its current upward corrective movement. Beyond the mentioned level, the recovery can extend up to the 1.1800 figure, ahead of last Thursday's high of 1.1836. The risk will turn towards the downside on a break below the 1.1600 figure, while the pair will gain bearish strength on a break below 1.1575, Friday and October's low, leaving doors open for a test of 1.1460 next week. 

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 Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD stays withing a touching distance of 0.9600

EUR/USD stays withing a touching distance of 0.9600

EUR/USD lost its bullish momentum and declined to the 0.9600 area during the American trading hours on Tuesday. The negative shift witnessed in risk sentiment seems to be helping the dollar gather strength and causing the pair to stay on the backfoot.

EUR/USD News

GBP/USD retreats from daily highs, trades near 1.0750

GBP/USD retreats from daily highs, trades near 1.0750

GBP/USD erased a portion of its daily gains in the second half of the day on Tuesday and fell toward 1.0750. The dollar capitalizes on upbeat consumer confidence data and the risk-averse market environment further weighs on the pair.

GBP/USD News

Gold edges lower toward $1,630 amid rising US yields

Gold edges lower toward $1,630 amid rising US yields

After having climbed above $1,640 earlier in the day, gold reversed its direction and dropped toward $1,630. The benchmark 10-year US Treasury bond yield turned positive on the day near 4% after upbeat US data, not allowing XAU/USD to preserve its bullish momentum.

Gold News

Powell calls for proper crypto regulations as Bitcoin shoots beyond $20,000

Powell calls for proper crypto regulations as Bitcoin shoots beyond $20,000

Powell reckons that a lot of thought must be put into regulating crypto activities. The crypto market’s bullish stint coincides with Powell’s speech “on opportunities and challenges of the tokenization of finance,” at the Louvre Museum in Paris.

Read more

Intel's Mobileye extends Geely partnership, TSMC says wafer orders down

Intel's Mobileye extends Geely partnership, TSMC says wafer orders down

As always, a lot is happening this week in the semiconductor space. Despite the continued decline of share prices all around, the major chip designers and manufacturers continue to announce significant moves.

Read more

Majors

Cryptocurrencies

Signatures