The Euro rose today after the NFP report (Non-Farm Payrolls) missed expectations. The report indicates the number of new jobs created in the US outside of the agricultural sector. It is considered one of the most important indicators of the health of the US economy and the monetary policy of the Fed (Federal Reserve).
The NFP data shows that the US economy created only 194,000 new jobs in October, well below the expected 450,000. This was the slowest job growth since early 2021. The unemployment rate is 3.9%, but the labor participation rate remained unchanged at 61.6%. This suggests that many people are still not actively looking for work.
NFP – 150,000 — Previous month: 336,000
Unemployment rate 3.9% — Previous month: 3.8%
Wage growth m/m 0.3% — Previous month: 0.2%
These data have dampened expectations that the Fed will soon raise interest rates to combat inflation. Inflation in the US has risen to the highest level in 13 years and is well above the Fed's target of 2%. However, the Fed has emphasized that the inflation is temporary and that it is more concerned about the labor market. The Fed has already announced that it will reduce its bond purchases starting in November, but it has not set an exact timetable for an interest rate hike.
A lower interest rate usually means a weaker dollar, as it reduces the attractiveness of US assets. A stronger interest rate usually means a stronger dollar, as it increases the demand for US assets. The EURUSD reflects the ratio between the Euro and the Dollar. If the EURUSD rises, it means that the Euro is gaining value against the Dollar. If the EURUSD falls, it means that the Euro is losing value against the Dollar.
The EURUSD rose to 1.0733 today, which corresponds to an increase of 1.06%. (Data Blackbull Markets). This is the highest level since the end of September. The EURUSD benefited from the weakness of the Dollar, but also from the strength of the Euro. The Euro was supported by positive economic data from the Eurozone, which showed robust growth and rising inflation. The European Central Bank (ECB) has also signaled that it will soon end its bond purchases and possibly raise interest rates earlier than expected.
The question now is whether the EURUSD will continue its recovery or experience a reversal. This depends on many factors, such as future economic data, the monetary policy decisions of the Fed and the ECB, and geopolitical tensions.
CHART ANALYSIS
Technically, the EUR has certainly signaled a clear buying interest today, which could lift it towards 1.0850 in the next few days. In this area, there is an important price level, which also corresponds to the 50% retracement of the previous price downturn.
However, caution should be exercised as sharp pullbacks often occur after strong rises, which can shoot many traders out of their long positions. Cautious traders will wait for pullbacks during the day to build long positions.
CONCLUSION
I see the EUR rising to 1.0850 in the next few days. Fundamentally and technically, the lights are green to build long positions.
The NFP data shows that the US economy created only 194,000 new jobs in October, well below the expected 450,000. This was the slowest job growth since early 2021. The unemployment rate is 3.9%, but the labor participation rate remained unchanged at 61.6%. This suggests that many people are still not actively looking for work.
NFP – 150,000 — Previous month: 336,000
Unemployment rate 3.9% — Previous month: 3.8%
Wage growth m/m 0.3% — Previous month: 0.2%
These data have dampened expectations that the Fed will soon raise interest rates to combat inflation. Inflation in the US has risen to the highest level in 13 years and is well above the Fed's target of 2%. However, the Fed has emphasized that the inflation is temporary and that it is more concerned about the labor market. The Fed has already announced that it will reduce its bond purchases starting in November, but it has not set an exact timetable for an interest rate hike.
A lower interest rate usually means a weaker dollar, as it reduces the attractiveness of US assets. A stronger interest rate usually means a stronger dollar, as it increases the demand for US assets. The EURUSD reflects the ratio between the Euro and the Dollar. If the EURUSD rises, it means that the Euro is gaining value against the Dollar. If the EURUSD falls, it means that the Euro is losing value against the Dollar.
The EURUSD rose to 1.0733 today, which corresponds to an increase of 1.06%. (Data Blackbull Markets). This is the highest level since the end of September. The EURUSD benefited from the weakness of the Dollar, but also from the strength of the Euro. The Euro was supported by positive economic data from the Eurozone, which showed robust growth and rising inflation. The European Central Bank (ECB) has also signaled that it will soon end its bond purchases and possibly raise interest rates earlier than expected.
The question now is whether the EURUSD will continue its recovery or experience a reversal. This depends on many factors, such as future economic data, the monetary policy decisions of the Fed and the ECB, and geopolitical tensions.
CHART ANALYSIS
Technically, the EUR has certainly signaled a clear buying interest today, which could lift it towards 1.0850 in the next few days. In this area, there is an important price level, which also corresponds to the 50% retracement of the previous price downturn.
However, caution should be exercised as sharp pullbacks often occur after strong rises, which can shoot many traders out of their long positions. Cautious traders will wait for pullbacks during the day to build long positions.
CONCLUSION
I see the EUR rising to 1.0850 in the next few days. Fundamentally and technically, the lights are green to build long positions.