The weaker dollar continues to push EUR / USD higher.

The weaker dollar continues to push EUR / USD higher. Yesterday markets ignored good data on domestic statistics from the United States. The ADP data displayed increase in the number of people employed in the non-agricultural sector by 250K with the forecast of 191K, but apart from a surge in volatility, the prints did not change anything in the market. The dollar continued to move lower, pushing the pair EUR / USD to higher levels.

Today, FX trading day will be influenced not only by news from the US, but also by European statistics. First, the market attention will be focused on the data on the consumer price index in the Eurozone, and it looks like some surprises may be expected for a single European currency, as the forecast is expected to decrease from 1.5% to 1.4%, while the forecasted inflation rate for ECB remains at 2.0%. Low inflation remains the main deterrent for the ECB to tighten its monetary policy, therefore the published data is extremely important and even if the data are released at the forecast level, it is will be harder for to keep on moving higher.

In the US today, there is a large statistical block on the labor market (the unemployment rate is expected at 4.1%, the average wage growth is projected at 0.3%, and the change in the number of non-farm workers by 190K) and PMI non-production sector (forecast 57.8 points).

Therefore, we are expecting a very interesting trading day today, but the dynamics of trading will largely depend on the statistical data published later today. The bunch of statistical data will provide tools for analysis on European and US economical details and may setup the market directions for a couple of months ahead.

On the chart, we can see the continuation of the uptrend, but we can not but note the gradual fading of the upward dynamics. This is clearly seen in the example of the indicator RSI which drew a divergence in relation to the price. This is a signal of a possible early turn of the price lower. We see the reversal signal on the AO indicator.

So the situation for bulls is not so clear, but adjustments to technical analysis today can bring fundamental data. To expect the further growth of the price is worth only with a sure breakdown and fixing the price above the level of 1.2093.

Trading recommendations – out of the market until market reaction to Non-farm data

Fort Financial Services