EUR/USD skates on thin ice as traders await early signals of Friday’s US NFP, namely the ADP Employment Change, amid sluggish markets. That said, the quote remains sidelined between 1.0645 and 1.0660, recently picking up bids from the bottom, during early Thursday morning in Europe.
Global markets remain dicey on Thursday even as growth fears join China-linked headlines. The reason could be linked to the cautious sentiment ahead of this week’s key data, as well as the US Treasury yields’ struggle to refresh its two-week high, down 1.2 basis points (bps) to 2.91% by the press time.
That said, the benchmark US 10-year Treasury yields jumped to the highest levels in a fortnight the previous day after strong US data joined comments from the Fed policymakers that portrayed the US central bankers’ likely aggression in lifting rates. It’s worth noting that fears of global growth and China-linked headlines are extra positive for the US dollar, due to its safe-haven appeal.
Fed’s monthly Beige Book and statements from St. Louis Federal Reserve Bank President James Bullard renewed recession fears the previous day. Also challenging the growth concerns were fresh headlines suggesting trade/political tensions between the US and China, as well as between China and Australia, not to forget fears emanating from the Russia-Ukraine crisis.
On the other hand, firmer US data also allowed Federal Reserve Bank of Richmond President Thomas Barkin to stay positive about the future rate hikes. The US ISM Manufacturing PMI for April rose to 56.1 versus the 54.5 expected and the 55.4 prior. Further, the US JOLTs Job Openings eased below 11.8 prior readings but matched 11.4 market forecasts.
Alternatively, no change in the Eurozone Unemployment Rate also exerted downside pressure on the EUR/USD prices even as comments from European Central Bank (ECB) Governing Council member Robert Holzmann defended bulls. The policymaker said that the record-high inflation print for the euro area supports the view that a 50 basis points rate hike will be needed.
Considering the sour sentiment and increasing odds of the Fed’s aggression in rate hikes, not to forget recently firmer US data, EUR/USD prices are likely to remain pressured. However, today’s US ADP Employment Change for May, expected at 300K versus 247K prior, will be eyed closely due to being the early signal for Friday’s US Nonfarm Payrolls (NFP). Additionally, the US Factory Orders for May, bearing forecasts of a 0.7% increase compared to 2.2% in previous readouts, could also entertain the pair traders.
Also read: US ADP Employment Change May Preview: The labor market recedes from center stage
A clear downside break of a three-week-old support line, now resistance around 1.0750, directs EUR/USD towards the 21-DMA level surrounding 1.0600.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.