The Dollar was supported by November reports on the US labor market
The EUR/USD pair was so impressed by last Friday’s statistics on the US labor market, that it managed to update the low it had reached on November 20th. The reports were positive indeed. Of course, there were some nuances, but in general, the statistics was very good.
So, the unemployment rate in the USA in November remained unchanged as expected, at 4.1%, the same as the October reading. It’s a very good result, given that a lot of investors had doubts about stability of the indicator. However, after falling in October, the indicator didn’t raise in November, and investors liked this fact. The non-farm employment change was 228K in November, although it was expected to be 198K. The number is a bit weaker than the October one, but it was expected and, therefore, didn’t disappoint anybody.
However, the indicator that describes salaries growth rate made investors doubt a bit. The average hourly earnings increased by 0.2% m/m in November, which is better than the month before when it lost 0.1% m/m. Still, the problem is that the indicator was expected to add 0.3% m/m. There hasn’t been stable dynamics in salaries growth for a long time: employers are revising salaries rather slowly, because they have to consider domestic demand and global economic outlook. And the market conditions aren’t always suitable for raising salaries.
As a result, November reports on the US labor market are looking quite positive. The US Dollar strengthened, but it will face several other events this week. On December 12th and 13th, the US Federal Reserve is scheduled to have another meeting, where it is expected to raise the key rate for the third time this year. Market expectations predict the increase of 25 basis points and investors are pretty fine with that.
In addition to that, the USA will publish reports on the retail sales and the industrial production. The European Central Bank will also have a meeting and the Eurozone is planning to report on several macroeconomic indicators as well. So, this week is anticipated to be very busy and intensive for the EUR/USD pair.
From the technical point of view, the H4 chart shows that the EUR/USD pair has tested the support level, rebounded from it, and right now may be forming a new rising impulse. In the mid-term, the price may continue falling towards the support level of the projected descending channel at 1.1605.
The short-term scenario for the EUR/USD pair is presented by the H1 chart. Apart from rebounding from the support level of the mid-term descending channel, the pair has also broken the resistance level of the short-term downtrend channel. If the uptrend continues, its targets may be the projected resistance levels at 1.1822 and 1.1863.
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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.