FX.co ★ Forecast for EUR/USD on August 7, 2020

EUR/USD

The euro made a symbolic crossover on the 31st yesterday, thus forming a divergence reversal with the Marlin oscillator on the four-hour chart. Now there is divergence on two scales simultaneously: daily and H4.

The single currency gained 14 points yesterday. The price is currently at the area where it ended Thursday. The Marlin oscillator is declining daily. We are waiting for the price to drop below the first target level of 1.1806, after which the way to 1.1620 will open.

The formed divergence is visible on the 4-hour time scale. We are waiting for the price to overcome the support of the MACD line, but a more effective signal for a further decline should be when the price moves under the target level of 1.1806 - the peak on July 29. After that, wait for the price at 1.1620.

Markets are waiting for the release of US employment data today. The forecast for new jobs in the Nonfarm sector for July is 1,530,000 against 4,800,000 in June. Business media consider the forecast insufficient for a speedy recovery, but we disagree with this position. In the context of the balance of currencies in the current situation, the main criterion is not so much Non-Farm Employment Change, but the general indicator of the unemployment rate. Unemployment in the United States was 11.1% in June, the forecast for July is 10.5%, which shows a faster recovery of the US labor market than in the eurozone, where unemployment even increased from 7.7% to 7.8% in June.

So, we are waiting for the euro's development towards a downward direction.