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June 4th, The euro is correcting after Friday's rise

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notesfortrader
@notesfortrader
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On Friday, June 4, at the end of the day, the euro rate rose by 0.33% to 1.2166. Over the week, the euro fell 0.21% to 1.2166. In anticipation of the payroll, the price dropped to 1.2104. Buyers were frightened by a series of positive US statistics, so they sold euros in anticipation of an excellent NFP.

In May, US companies in the non-agricultural sector created 559 thousand new jobs against the forecast of 650 thousand. Investors are disappointed, despite the improvement in other indicators: lower unemployment and growth in average hourly wages.

As a result of Friday, the dollar index and the yield on 10-year Treasury bonds collapsed, supporting the major currencies. The euro rate returned to the level of 1.2185.

Scheduled statistics (GMT +3):

  • 10:30, Britain is to release the Halifax House Price Index for May.
  • 11:30, the Eurozone will present the Sentix Investor Confidence Indicator for June.
  • 21:00, the US will report on the change in the volume of consumer lending for April.

Current situation:

At the time of this writing, the euro is worth 1.2147. Closer to the opening of the European session, the main currencies turned red. Asian market participants refused to continue the movement that began after the release of the NFP report.

Manufacturing orders in Germany fell by 0.2% in April against the forecast of + 1.0% and the previous value of 3.9%. The news did not damage the euro. The pair dropped to the level of 1.2147 as part of the correction to Friday's rise. But the pound fell in price against the background of the continuation of the rise in the EUR / GBP pair.

The yield on 10-year US bonds is 1.57%. Market participants are waiting for new news. The key event for the euro will be the ECB meeting and K. Lagarde's press conference. No surprises are expected from the regulator, so if traders do not change their sentiments by the Friday NFP report, the growth will continue.

It is important for buyers to defend the level of 1.2130 (45 gr., 2), as they could not return to the level of 1.2210 on Friday. MA lines are directed downwards, so it is easier for sellers to push the price down than buyers up.

The price is on the balance line (sma 55), therefore, without the activity of buyers, the price can fall to 1.2097 (3). In any case, it is worth watching the dynamics of American bonds. If they continue to rise in price, the single currency will strengthen after them.

At higher time frames, resistance is the level of 1.2350. After passing it, the road to 1.2430 will open for buyers. Support is the level of 1.1965.

Summary: the euro bounced to 1.2185 after the NFP was published, while buyers were unable to turn the tide. The price has corrected to 1.2145 and is trading on the balance line (sma 55) - 1.2156. The yield on US 10-year bonds (US10Y) is 1.57%. Since the economic calendar is empty for the euro on Monday, US10Y is an indicator for the foreign exchange market. EUR / USD needs to hold above 1.2130 before lunchtime on June 8 to continue its upward movement.

Posted Using LeoFinance Beta