Key Highlights
- The Euro started an upside correction and recovered above the 1.1620 resistance against the US Dollar.
- There was a break above a bearish trend line with resistance near 1.1650 on the 4-hours chart of EUR/USD.
- The US Nonfarm Payrolls in May 2018 rose from the last revised reading of 159K to 223K.
- Today in the US, the Factory Orders figure for April 2018 will be released, which is forecasted to decline 0.3% (MoM).
EURUSD Technical Analysis
The Euro was under a lot of pressure this past month as it declined below the 1.1550 support against the US Dollar. The EUR/USD pair traded as low as 1.1509 before a fresh recovery was initiated.
Looking at the 4-hours chart, the pair moved above the 1.1600 resistance and the 23.6% Fib retracement level of the last decline from the 1.1993 high to 1.1509 low.
More importantly, there was a break above a bearish trend line with resistance near 1.1650 on the 4-hours chart of EUR/USD. The pair traded towards the 1.1725-50 resistance area where sellers appeared.
There was also an attempt to move above the 38.2% Fib retracement level of the last decline from the 1.1993 high to 1.1509 low. On the upside, there is a crucial barrier near the 1.1750 level and the 100 (red) simple moving average (4-hour).
Therefore, if the pair continues to move higher, it is likely to face hurdles near the 1.1725 and 1.1750 levels. On the downside, the previous broken resistance at 1.1640 and 1.1620 are likely to act as supports.
Recently in the US, the Nonfarm Payrolls report for May 2018 was released by the US Department of Labor. The market was looking for a decline a reading of 188K, more than the last 164K.
However, the actual result was better as the total nonfarm payroll employment increased by 223K in May 2018. The report added:
The unemployment rate edged down to 3.8 percent in May, and the number of unemployed persons declined to 6.1 million. Over the year, the unemployment rate was down by 0.5 percentage point, and the number of unemployed persons declined by 772,000.
The overall outcome was positive and it is likely put a lot of pressure on EUR/USD and GBP/USD in the near term. On the other hand, USD/JPY pair may rise further above 109.50 in the near term.
Economic Releases to Watch Today
- UK’s Construction PMI for May 2018 – Forecast 49.7, versus 52.5 previous.
- Euro Zone Sentix Investor Confidence for June 2018 – Forecast 20.8, versus 19.2 previous.
- US Factory Orders April 2018 (MoM) – Forecast -0.3%, versus +1.6% previous.
