By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
The major currency pair is starting another week of July with a slight growth and trading at 1.1858.
Earlier, the “greenback” couldn’t achieve its potential and strengthen due to the long weekend and some controversial statistics on the US labor market. For example, the Non-Farm Employment Change showed 850K in June after being 583K in May. It’s good news. However, this is where the good news ended. The Unemployment Rate rose from 5.8% in May to 5.9% in June.
Apart from that, the Average Hourly Earnings showed 0.3% m/m in June, which is worse than the previous reading of 0.4% m/m.
Later, there was some positive news from the United States Department of Commerce, according to which the Factory Orders added 1.7% m/m in May after losing 0.1% m/m the month before. On YoY, the indicator expanded by 17.2%.
In the H4 chart, after finishing the descending wave at 1.1809, EUR/USD has formed a new consolidation range around 1.1888, which may be considered as the center of the third descending wave towards 1.1600. Today, the pair may correct to test 1.1890 from below and then resume trading within the downtrend to break 1.1777. After that, the instrument may continue falling with the short-term target at 1.1700. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is trading below 0 outside the histogram area, thus confirming an ascending structure on the price chart.
As we can see in the H1 chart, after completing the descending wave at 1.1809 and then finishing a new rising impulse towards 1.1850, EUR/USD is trading around the latter level and forming a correctional continuation pattern. Possibly, the pair may break it to the upside and finish the correction at 1.1890. After that, the instrument may resume trading downwards with the target at 1.1800. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: after rebounding from 20, its signal line is steadily moving upwards. Later, the line may break 50 and continue growing towards 80.
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.