Yahoo Finance EUR/USD Daily Forecast – Euro Continues to Probe Weekly Lows
EUR/USD made a notable bearish break lower this week, falling below its 200-day moving average as well as the significant 1.1000 price point.
Market participants will be watching how the US labor market is doing with unemployment claims due for release later in the day. Last week, a record 3.2 million additional individuals filed for claims.
Bank of American has an extreme view and thinks that today’s claims report can rise above 5 million. The average forecast is for 3.6 million new people filing for claims.
Further, there have been reports that the Department of Labor is unable to keep up with the sudden increase in new claims. This could lead to an upward revision to the already unusually high figure reported last week.
A weak jobless claims report today will likely cause the markets to adjust positions ahead of Friday’s nonfarm payrolls report which is expected to show a decline of 100 thousand jobs and a rise in the unemployment rate to 3.8%.
Boston Fed President Eric Rosengren commented yesterday that he expects a dramatic rise in the unemployment rate. In late March, St. Louis Fed President James Bullard said the jobless rate may rise to as high as 30% in the second quarter.
The March ADP report, released yesterday, showed a loss of 27 thousand jobs while analysts had expected a steeper decline in the number of workers of 150 thousand.
Technical Analysis
While EUR/USD has displayed a clear bearish trend this week, buyers have held the pair above support at 1.0920 for two consecutive days. In early trading on Thursday, the pair is once again probing the same level.
A declining trendline from last week’s highs is in play on an hourly chart and a break above it might offer the first sign of a reversal. A sustained move above 1.1031, however, would offer a much stronger conviction that the pair remains within the uptrend that started in late March.
On the other hand, if the pair manages to break through 1.0920, it would suggest the bearish trend is still intact. There may even be an acceleration in downwards momentum considering the level has proven to be a major hurdle for bears in the early week.
Bottom Line
EUR/USD has shown weakness in the early weak although buyers have been supporting dips to 1.0920.
US jobs data over the next two days is expected to show a notable rise in unemployment which stands to adversely impact the dollar.
This article was originally posted on FX Empire
