Another week is almost over, with the EUR/USD pair having flirted with 1.1900 for the first time in over two years and the greenback mixed across the board, but still weak. The American currency only gained these last few days against currencies that eased on self-weakness, as the negative sentiment towards the greenback remains intact. If anything, chances of a rate hike in the US have decreased further on dovish comments from Fed's officers, while political jitters keep coming as President Trump seems unable to focus beyond the Obamacare repeal bill and North Korea, still struggling to form a reliable team around him.
Traders have one more milestone to surpass this week that is, the US monthly employment report, to be release this Friday. The country is expected to have added 183K new jobs in July, after June's positive surprise of 222K. The 4.4% unemployment rate is still expected to drop to 4.3%, while average hourly earnings are expected to be up 0.3% monthly basis, and by 2.4% on the annualized figure, this last, slightly below previous 2.5%.
There's has been long since the US Nonfarm Payroll report triggered interesting market movements, except in the case of big disappointments, quite logical given the ongoing distrust in dollar's future. And that will be the case for this Friday: the NFP report will only be relevant if it's a big miss.
All components will be relevant, but jobs' creation and wages will take center stage, as slow wage growth will maintain inflation subdued, and with poor inflation, there are no rate hikes in the Fed's book.
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The weekly chart shows that the price is now above its 200 SMA, the first time since July 2014, while technical indicators maintain their upward slopes within overbought territory. In the daily chart, the RSI indicator keeps heading higher around 75, while the Momentum indicator consolidates near its recent record highs, as all of the moving averages head north far below the current level, all of which supports more gains ahead.
Beyond 1.1910, the next resistance comes at 1.1950, followed by the critical 1.2000 threshold, where the market can also rush to take profits out of the table. To the downside, 1.1830 is the immediate support, with a more relevant one at 1.1785. Below this last, the corrective movement can extend down to 1.1715, August 2015 high, without affecting the dominant bullish trend.
Reference: FXS
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