U.S. NFP Figures in Highlights!
The EUR/USD extended its bearish trend for the 3rd consecutive session on Thursday and dropped more than 1% on the day to reach its lowest level since 14th May. The rebound drove the sudden decline in the currency pair in the greenback after the U.S. Treasury yields rose above 1.62% amid stronger-than-expected U.S. jobs & PMI figures. On Thursday, at 12:15 GMT, the Spanish Services PMI surged to 59.4 against the anticipated 57.8 and supported the single currency Euro that further capped losses in EUR/USD. At 12:45 GMT, the Italian Services PMI also rose to 53.1 against the projected 52.4 and supported Euro, limiting the declining prices of the EUR/USD pair. At 12:50 GMT, the French Final Services PMI remained flat with the expected 56.6. At 12:55 GMT, the German Final Services PMI also remained unchanged at 52.8. At 13:00 GMT, the Final Services PMI from the whole bloc also came in line with the predicted 55.2.
From the U.S. side, at 16:30 GMT, the Challenger Job Cuts for the year declined in May to-93.8% compared to the previous -96.6%. At 17:15 GMT, the ADP Non-Farm Employment Change rose to 978K during May against the projected 645K and supported the U.S. dollar that added further losses in EUR/USD. At 17:30 GMT, the Unemployment Claims declined during last week to 385K against the anticipated 400K and supported the U.S. dollar and dragged EUR/USD further on the downside.
The Revised Non-farm Productivity for the quarter remained flat with the projections of 5.5%. The renewed Unit Labor Costs for the quarter surged to 1.7% against the predicted -0.4% and supported the U.S. dollar. At 18:45 GMT, the Final Services PMI remained flat to the estimated 70.4. At 19:00 GMT, the ISM Services PMI rose to 64.0 against the projected 63.0, supported the U.S. dollar, and dragged EUR/USD downward. The U.S. dollar was firm on Thursday against its rival currencies and rose above 90.5, which added downward pressure on the currency pair. The stronger-than-expected jobs figures, along with an expansion reported in Services PMI combined with the rising U.S. Treasury yields, added massive support to the greenback that weighed heavily on the EUR/USD pair.
Besides, the European Central Bank warned on Wednesday that if countries do not introduce digital versions of their currencies, they could face threats to their financial systems and monetary independence. The report added that consumers and businesses, including foreign tech giants without their digital currencies, would likely end up being reliant on a small number of leading payment service providers. This could affect the ability of the central bank to fulfill its mandate and act as a lender of last resort. After these comments from ECB, the single currency came under further pressure and declined more against the U.S. dollar on Thursday.
EURUSD Intraday Technical Levels
Pivot Point: 1.2153
EUR/USD - Technical Outlook**
The EUR/USD pair has begun trading with a solid bearish trend amid a stronger U.S dollar at the 1.2108 level. The pair has violated the upward trendline support area of 1.2167 level. Below this, the EUR/USD pair has formed a bearish engulfing pattern that’s exposing the pair towards the next support area of 1.2095 level. The direct currency pair’s resistance hold’s at 1.2132 and 1.2188 levels while the support holds around 1.2095 and 1.2054 levels. The primary focus of traders will remain on the U.S. Nonfarm Payroll figures as this typically drives dramatic movement in the U.S dollar-related pairs. All the best and have a lovely weekend!
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