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James Hyerczyk

The Euro is trading higher following the release of the better-than-expected U.S. Non-Farm Payrolls report for June, however, gains are being limited by another surge in weekly unemployment claims.

Traders should note that the NFP numbers are looking backward and the initial claims report is looking forward.

The Labor Department’s employment report showed 4.8 million jobs were created in June. Economists were expecting 2.9 million jobs were created. The unemployment rate fell to 11.1% from 13.3% in May. Economists were looking for a rate of 12.4%, according to Dow Jones.

Additionally, the Labor Department said Thursday that initial claims rose by 1.427 million in the week-ending June 27. Economists polled by Dow Jones expected initial U.S. jobless claims to rise by another 1.38 million, down from 1.48 million the week earlier.

The data also showed the number of continuing claims – the number of people receiving unemployment benefits for consecutive weeks – rose to 19.29 million, an increase of about 59,000.

At 12:53 GMT, the EUR/USD is trading 1.1280, up 0.0028 or +0.25%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, the momentum is trending higher. A trade through 1.1349 will change the main trend to up. A move through 1.1185 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. A trade through 1.1185 changes the minor trend to down.

The minor range is 1.1422 to 1.1168. Its 50% level or pivot at 1.1295 is potential resistance, but also the trigger point for an acceleration to the upside.

The nearest support is the Fibonacci level at 1.1167. This is followed by the 50% level at 1.1066.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the pivot at 1.1295.

Bullish Scenario

A sustained move over 1.1295 will indicate the presence of buyers. This could drive the EUR/USD into 1.1349 and 1.1353. Taking out the latter could trigger a surge into the main top at 1.1422.

Bearish Scenario

The inability to overcome 1.1295 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into a series of potential support levels including a main bottom at 1.1185 and a support cluster at 1.1168 to 1.1167.

For a look at all of today’s economic events, check out our economic calendar.
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