By Gabriel Ojimadu, Alpari
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On Friday the 1st of June, trading on the EURUSD pair closed down. Volatility was high during the US session after the publication of statistics from the US jobs market. This resulted in a decline for the euro to 1.1617.
The US labour market exceeded market expectations in May. New jobs added and average hourly earnings came out higher than predicted, while unemployment was lower than expected. This strengthened expectations among traders of the US Fed raising interest rates this June. The dollar gained some ground on this news along with US10Y bond yields.
The nonfarm payrolls report has a strong but short-lived effect on the USD exchange rate. From its low of 1.1617, the euro recovered to 1.1680.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
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Today (Monday the 4th of June), the euro has strengthened its position against the greenback. The rate has risen by 0.34% to reach 1.1696. On the technical side, there’s nothing to stop the euro from breaking the support zone of 1.1706 – 1.1716. Given that the stochastic is in the sell zone; before it rises, I expect to see the rate drop to the trend line at 1.1600 before rebounding to around 1.1700.
Today is Monday and the economic calendar is pretty much empty. Since leaving a long shadow on the 17:00 candlestick on the hourly timeframe, the scales have tipped in favour of the bulls. I’d like for trading this Monday to be relatively calm and for the rate to remain within a range of 1.1645 – 1.1725 up until trading opens in Europe on Tuesday. If everything goes as planned today, then tomorrow I’ll consider a session rally to 1.1795 for the euro.