Since the beginning of the week, the USD has lost positions against the basket of the world currencies. The USD index (#DX) updated the local minimums. The investors began to partially fix positions on USD after a long rally. The USD remains under pressure due to the possible lowering of the key interest rates by the Federal Reserve. Earlier Donald Trump criticized the Central Bank for its «strong dollar» policy. According to CME FedWatch Tool, more than 95% of the financial market participants expect the Federal Reserve to lower the key interest rate by 25 basis points to 1,75%-2,00%.
The investors are waiting for the publication of the US labour market report for August on Friday, September 6. This report might influence the Federal Reserve`s decisions regarding the further correction of the monetary policy.
The latest reports from the US were rather optimistic. Preliminary data from ADP pointed to an increase of the non-agrarian industry employees to 195K, which is higher than the forecasted value of 148K. The customer trust index reached 135,1 while 129,5 was expected. At the same time, the non-industrial business activity index grew from 53,7 to 56,4.
The experts expect mixed reports from the labour market: the number of the non-agrarian employees might insignificantly drop to 160000; the average wage growth will reach 0,3% (month-to-month) while the unemployment level will remain at 3,7%. Keep an eye on the difference between the factual and forecasted values.
The review of the EUR/USD technical picture
- Support levels: 1.10250, 1.09750, 1.09300
- Resistance levels: 1.10750, 1.11150, 1.11600
- - the price has crossed 50 MA and 200 MA.
- - The MACD histogram began to ascend.
EUR/USD keeps recovering after a prolonged descend. The trading instrument has updated the local maximums. The quotes have reached the mirror resistance at 1,10750. 1,10250 acts as a local support. The indicators do not provide precise signals.
Open positions from the key levels.
If the reports from the US turn out to be weak, expect further recovery of EUR/USD to 1,11150 with potential movement to 1,11500-1,12000.
Alternatively the quotes can descend to 1,09800-1,09600.
Seek evidence and market entry points on smaller timeframes. Use trailing stop for following your positions.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.Open Account