Forex Opinion & Analysis

U.S. Dollar Has Strengthened Well

On Monday, EUR/USD looks stable near 1.1760 after sharp fluctuations last Friday.
The USA published labor market statistics for July, and they were marvelous. The unemployment rate last month dropped to 5.4% from 5.9% previously, while the expected result was 5.7%. The NFP in July grew by 943 thousand, much higher than expected. Also, the NFP for June have been revised for better, to 938 thousand to 850 thousand.
Average hourly wage in the USA in July grew by 0.4% m/m against the 0.3% m/m forecast.
The statistics cheered capital markets up and gave base for talks that the Federal Reserve System might change the rhetoric about stimulation to something tougher.
On H4, EUR/USD bounced off 1.1830, reaching the local goal of another wave of decline at 1.1741. Today the market demonstrated an impulse of growth to 1.1761 and corrected to 1.1750. At the moment, the market is breaking through 1.1761 upwards, practically forming a consolidation range around 1.1750.

With an escape upwards, a correction to at least 1.1830 (at least) might develop. With an escape downwards, the trend might continue to 1.1600. Technically this idea is supported by the MACD. Its signal line is trading at its lows, getting ready to escape the histogram area. And this practically opens a potential for growth to zero.
In H1, EUR/USD has almost reached the local goal of the wave of decline. Today we expect a new impulse of correction to reach 1.1750 (a test from above).

Then one more structure of growth to 1.1788 might develop, and the correction might then reach 1.1830. Then we expect another wave of decline to 1.1740. Technically, this idea is confirmed by the Stochastic. Its signal line broke through 50 upwards and reaches 80. At the moment, the indicator has already dropped back to 50 and is testing it from above. We expect a bounce off it and further growth to 80.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex


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