November 8th, buyers are determined to test the trend line for strength


  • The recovery of the US labor market accelerated in October. The NFP report turned out to be better than the forecast.

By the end of the week, major currencies showed mixed dynamics. Growth against the US dollar was shown by the Japanese yen (+ 0.52%), the Swiss franc (+ 0.34%) and the euro (+ 0.06%). The Australian dollar (-1.59%), the British pound (-1.38%), the New Zealand dollar (-0.72%) and the Canadian dollar (-0.60%) closed in the negative zone.

On Friday, November 5, trading in the euro ended with growth. The euro rose 0.12% to 1.1568. In the first half of the day, the euro rate declined to 1.1513, in the second it renewed its maximum at 1.1573.

At the European session, the euro was under pressure after the release of statistics in the euro area. In September, retail sales fell 0.3% MoM after rising 1% in August (+ 0.2% forecast). Further details of the publication showed that retail sales in the EU were down 0.2%. On an annualized basis, the retail sales index rose 2.5% in the euro area and 3.2% in the EU.

Increased volatility in the foreign exchange market was observed in the American session after the publication of the US employment report. The number of jobs in the United States in October increased by 531 thousand (the forecast was 450 thousand). The indicator for August was revised from 366 thousand to 483 thousand, in September - from 194 thousand to 312 thousand.The overall revision amounted to +235 thousand.The unemployment rate in October decreased from 4.8% to 4.6% against the forecast of 4 , 7%. The report on the unemployment rate includes only those citizens who are actively looking for work.

Average hourly wages rose to $ 30.96 from $ 30.85 a month earlier, up 0.4% (+ 0.4% forecast). In annual terms, the average hourly wage rose by 4.9%, in line with the forecast.

The dollar strengthened after the release of the report and immediately followed by its sale - profit taking before the weekend. The dollar has been strengthening since the beginning of the week, so the market managed to immediately lay an excellent NFP report.

Late Friday night, the US House of Representatives passed a bipartisan infrastructure bill. The Senate approved a bill to restart transportation, utilities and broadband in August. A second bill (about $ 1.75 trillion) on taxes and spending has yet to be passed.

Scheduled statistics (GMT +3):

  • At 16:10, ECB Executive Board Member F. Lane will deliver a speech.
  • At 17:00, FOMC member Richard Clarida will speak.
  • At 18:30, US Federal Reserve Chairman Powell will deliver a speech.
  • At 18:55, FOMC member John Williams will give a speech.
  • At 20:00, the Governor of the Bank of England E. Bailey and FOMC member Michelle Bowman will deliver speeches.
  • At 21:50, FOMC member Charles Evans will speak.

Current situation:

In Asia, the major currencies are showing mixed performance. New Zealander, Australian and Canadian traded in positive territory. The EUR/USD pair is consolidating around the 1.1563 level. Today the economic calendar is empty, but there are many speakers. Among them are the head of the US Federal Reserve and the head of the Bank of England E. Bailey. On Tuesday, the head of the ECB K. Lagarde will be added to them.


Technical analysis:

The EUR/USD pair has stabilized at 1.1560. Resistance is at 1.1575 (trending line from 1.1690). On Friday, the dollar was under pressure from the declining yield on 10-year bonds (UST10). On Monday, it rose to 1.469% per annum. If the fall in UST10 accelerates, the fall in the dollar index will accelerate. The value of the dollar index is 94.26 p. Support is located at 94.12.

Buyers ran into 45 degrees. Buyers can safely walk up to 67 gr. - 1.1593 within the corrective movement. If they fail to pass 1.1575, then we should expect a decline to 1.1540 (a rollback to growth from 1.1513 to 1.1573). Now market participants will switch to the US Federal Reserve meeting, which will be held on December 14-15.

Summary: the euro closed higher on Friday, despite an excellent NFP report. Trading in Asia was relatively calm. The euro is trading at around 1.1565. Buyers are determined to test the strength of the trend line from 1.1690. The focus of traders' attention has shifted to the US Federal Reserve meeting, which will be held on December 14-15. Since today is Monday, the sideways movement is expected from the EUR/USD pair in the range of 1.1535-1.1590.

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