Euro Holds Firm Despite Positive Nonfarm Payrolls Data
InstaForex Group | Nov 08, 2021 07:40AM ET
The Nonfarm Payrolls report released on Friday turned out to be upbeat once again.
According to NFP data, the US unemployment rate fell to 4.6% from 4.8%. Besides, the economy added 531,000 new jobs in October. Apparently, unemployment is likely to decline further.
Moreover, if the results of the recent FOMC meeting left some room for discussion regarding the timing of the asset purchases tapering, fresh jobs data brought more clarity. Given the current unemployment level, the Fed is likely to reduce the quantitative easing program in the near future.h2 US Unemployment Rate:
Despite the strong jobs report, the euro was even able to rebound slightly. The reason for its small growth was its significant drop the day before. As a result, the euro was extremely oversold. Apart from that, the euro held firm amid positive fresh data in the euro area. Retail sales rose to 2.5% from 1.5%, while economists had expected the reading to total 1.7%.
The euro strengthened considerably amid buoyant consumer activity. Today, the economic calendar is completely empty. This is why the euro is likely to consolidate in the current range.
h2 EU Retail Sales:Last Friday, the euro/dollar pair reached the low of 2021. Yet, bears failed to push the pair below the support area of 1.1525/1.1535. As a result, the volume of short positions sharply decreased, triggering a technical correction.
The RSI indicator has crossed the 30 line on the 1H chart, signaling that the euro is currently oversold.
Despite the price rebound, the descending cycle that started in early June is still strong as demand for the US dollar keeps growing.
h2 Outlook/h2During the corrective movement, the euro returned to 1.1570. Then, it remained flat in the range of 1.1550/1.1570.
So, the euro may stay in this range for some time. It may give bears time to regain ground and push the quotes down again.
If so, it is recommended to stick to the breakthrough strategy.
h2 Trading tips:/h2
Get The News You Want
It is better to open long positions if the price consolidates above 1.1575.
It is recommended to go short if the price fixes below 1.1545.
Technical indicators give a buy signal on short-term and intraday charts amid technical correction.
InstaForex Group
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