Daily Market Recap – EURUSD Dollar rises after strong US jobs report

The U.S. economy added more jobs than expected in July, as the labor market was buoyed by strength in the service sector. Data released Friday by the Labor Department showed 943,000 nonfarm payrolls were created last month, compared to an average forecast of 850,000 by economists.

The unemployment rate fell to 5.4% in July from 5.9% the month before. The unemployment rate fell to 5.4% in July from 5.9% in the previous month and the average hourly wage increased by 0.4% in July, compared to an expected 0.3%.

The July employment figures were particularly awaited by investors, as the U.S. Federal Reserve has linked the tightening of its monetary policy based on the good health of this indicator of the labor market.

Christopher Waller had announced on Monday that the Fed could begin to reduce its asset purchase program by October if the next two employment reports counted about 800,000 and 1 million job creations. Investors will therefore scrutinize the Jackson Hole symposium, which will bring together many central bankers at the end of the month, the markets are looking for indications on the effective date of “tapering”.

From a technical perspective, the larger-than-expected increase in job creation was greeted by a rise in the dollar. The euro is giving up ground and heading towards its support at $1.1755.

In the short term, the EURUSD is locked in a consolidation range between $1.1900 and $1.1750. An incursion below the lower bound would lead to a continuation of the bearish flow towards $1.1710 and then $1.1638.

On the other hand, if buyers show up at $1.1755, then prices could start a new rotation to reach $1.1900. Furthermore, a breach of this threshold would open the way for a bullish recovery in the form of a double bottom. As a result, the pair would begin a bullish rebound to regain the next resistance levels.

(Chart Source: Tradingview 08.08.2021)

To summarize, the euro seems to be weakened for the coming week, EURUSD traders will likely have to wait for the break of one of the two limits to have the signal of the next directional flow.

Support & Resistance Levels:

R3 1.20518

R2 1.19206

R1 1.18394

S1 1.17100

S2 1.16380

S3 1.14500

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.