The statistics on the US employment published last Friday helped the USD to recover a little bit and this positive factor is still working for the “greenback”. For example, the Unemployment Rate dropped to 10.2% in July after being 11.1% in June and against the expected reading of 10.5%. The Non-Farm Employment Change showed 1.763M against market expectations of 1.53M.
The Average Hourly Earnings in the USA added 0.2% m/m in July, which is much better than the expected reading of -0.5% m/m.
It goes without saying that the labor market is still trying to rebound after major stress but it’s already clearly seen that the creation of new jobs will require as much as effort as it takes.
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In the H4 chart, EUR/USD is correcting downwards to reach 1.1740 and may later form one more ascending wave with the target at 1.1940. After that, the instrument may start a new decline to 1.1700. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving downwards outside the histogram area, thus indicating a correction on the price chart.
As we can see in the H1 chart, after forming a consolidation range at 1.1828, which may be considered as a downside continuation pattern and a correctional wave, and breaking it to the downside, EUR/USD is expected to resume trading upwards to return to 1.1828. After that, the instrument may continue the correction with the target at 1.1740. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: after rebounding from 80, its signal line is moving downwards. In the future, the indicator is expected to reach 50 and then may return to 80.
Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.