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EURUSD: expected rebound towards LB

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On Tuesday, the 8th of August, trading on the euro/dollar pair closed down. For 13 hours, the rate traded within a 20-pip range from 1.1800 – 1.1820. The job openings data from JOLTS helped sellers take it out of this range. In the space of two hours, the euro fell by 97 pips to 1.1715.

This index has never had much of an effect on the currency market as it’s a lagging indicator, so I’ve never paid much attention to it. Last Friday, the NFP report came out for July, while the data from JOLTS refers to June.

The market reacted to a record number of new job openings (6.163m against a forecast of 5.775m). Traders interpreted this as another signal of improving labour market conditions as well as a factor that could lead the Fed to tighten their monetary policy in December.

Day’s news (GMT 3):

  • 15:30 Canada: building permits (Jun).
  • 15:30 USA: nonfarm productivity (Q2), unit labour costs (Q2).
  • 17:00 USA: wholesale inventories (Jun).
  • 17:30 USA: EIA crude oil stocks change (4 Aug).
  • 20:00 USA: 10-year note auction.

EURUSD rate on the hourly. Source: TradingView

From 1.1824, the rate collapsed by 90 degrees to 1.1715. The first ricochet amounted to 55 pips (50% of the drop). In Asia, the price rebounded from this level again. This isn’t a key support level, but when there’s no economic news, the price bounces off it quite often.

Since the Stochastic hourly indicator is in the buy zone for euros while the AO is below the zero line, I’m expecting to see the euro rise to 1.1776. Prepare yourselves for the price to restore to 1.1796. The bullish trend will only change when the price goes below 1.1650.

If the trading day closes at around 1.1720, then on Thursday, we could see the price fall as far as 1.1660. So today, I will refrain from selling.


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