EURUSD Ticks Lower after US jobs data
06 May 2022
The EURUSD pair moved lower from its daily highs but remained somewhat higher on the day, trading at 1.0560 shortly after the US labor market figures.
US jobs market remains strong
Earlier today, data showed the US economy posted 428,000 new jobs for April, precisely at the March level and higher than the 391,000 expected. As a result, the unemployment rate stayed at 3.6%. However, wage growth slowed monthly, down to 0.3% from 0.5% previously, while the yearly change slipped a notch from 5.6% to 5.5%.
Since the numbers came somewhat in line with expectations, there was no initial volatility. However, the market's medium-term trends are expected to continue since today's numbers have reinforced the Fed's hawkish stance on monetary policy.
However, recent improvements in payrolls and earnings and a lower unemployment rate have not translated into a similar gain in many Americans' financial situations. Consumer price rises have outpaced earnings growth as inflation has reached 40-year highs. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) in the United States climbed at an annual pace of 8.5 percent in March, the quickest since 1981.
Still above 1.05
The key support for the following days seems to be at the 1.05 level. Once it is broken, the euro could quickly decline to 1.035 - the 2016/2017 lows.
On the other hand, the resistance could be found at Wednesday's lows near 1.063. But as long as the euro trades below 1.08, the medium and long-term bearish outlooks remain intact.