Trading in the EURUSD pair ended with a slight downturn. The euro depreciated 0.13% against the US dollar to 1.1836. The pair was in consolidation mode at 1.1848 as of 15:30 (GMT 3 hours). Notably, the euro slid 73 points to 1.1781 after the US nonfarm payrolls report came out.
The number of new jobs created stateside came in slightly below expectations, but still stood at quite a high level. The US economy added almost 1.371 mln jobs over the past month (vs. the median forecast of 1.4 mln). According to the revised data, the number of jobs in July increased by 1.734 mln, and not by 1.763 mln, as previously reported. The unemployment rate exceeded expectations and decreased to 8.4%.
The easing of lockdown restrictions helped boost employment over the summer, although this trend has moderated somewhat recently. The termination of coronavirus relief funds from the federal budget exerts an immediate impact on the labor market. In the upshot, the US economy is now dependent on state subsidies.
From a low of 1.1781, the euro surged to 1.1855. The rebound in the dollar may have been due to the upcoming long weekend stateside. On Monday, North American markets will be closed in observance of Labor Day.
Today’s macro agenda (GMT 3):
Labor Day long weekend in the US and Canada
At the time of writing, the euro was trading at 1.1829. The price action is hovering near the balance line. A double bottom pattern has shaped up on the hourly timeframe. If a channel forms at the bottoms, the resistance level will be located at 1.1855. Buyers need to muster a breakout above 1.1865 in order for the recovery to gain traction.
Liquidity will be noticeably reduced during the North American session given that today is a long weekend in Canada and the US, while trading floors will be offline in these countries. For this reason, our forecast calls for an extension of the side trend in the 1.1816-1.1855 price range. Meanwhile, there are no major releases on today’s macro agenda. Players should also note that 1.1750-1.1795 is a broad support area.