Market Analysis

The U.S Dollar holds support ahead of the US monthly jobs report

The U.S Dollar is holding above its key 200-day moving average ahead of the release of the June Non-farm payrolls jobs report later today, following a slight improvement in some key U.S data points. Today’s job report is likely to have a huge impact on the U.S Dollar, as the Federal Reserve still remain data dependant on whether to cut interest rates at the next FOMC policy meeting on July 31st.

Most economists are predicting that the United States economy created 185,000 new jobs last month, marking a vast improvement on the May headline figure, of 75,000. The recent US ADP jobs reports showed that 102,000 private sector jobs were created last month, bettering the disappointing 41,000 headline figure from May.

Traders and investors are still pricing-in almost a 100 percent certainty that the Federal Reserve will hike interest rates at the next policy meeting, leaving today’s job number wide-open to upside surprises. Recent important U.S macroeconomic data releases have suggested that the downturn in the American economy is less severe than predicted.

The June ISM manufacturing report came in slightly better than expected, while the June manufacturing PMI failed to fall into contraction as feared. Worryingly, the ISM report showed job losses worsening, while the four-week moving average of U.S jobless claims has been steadily trending higher. U.S consumer confidence is also at a lower level, while the ISM-non-manufacturing reading came in below consensus forecasts.

Inside today’s report, we also get the all-important U.S unemployment rate and the average hourly earnings figures for traders and investors to digest. The market reaction is likely to be U.S Dollar negative if the monthly payrolls headline figure is under the 100,000, as the labour market is the current bright-spot for the U.S economy.


EUR/USD Mountain Chart        Source ActivTrader Platform

EUR/USD Mountain Chart | Source: ActivTrader 


The EUR/USD pair should provide a solid indication of how market participants feel about the US job report later today. The EUR/USD pair has been under pressure this week as the US Dollar starts to gain back lost ground. Key support is found at the 1.1220 and 1.1190 levels, while key resistance is found at the 1.1310 and 1.1359 levels.


Written by Nathan Batchelor, External Analyst, ActivTrades

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