FX.co ★ Hot forecast and trading recommendations for EUR/USD on 09/07/2020

Quite frankly, the content of the Labor Department report was excellent. Nobody expected such good results. And it is clear that the dollar immediately began to strengthen. But the fact is that at the end of the day, the quotes remained at the same level from which it started the trading day. And the European Central Bank is responsible for this. But first things first.

The unemployment rate in the United States fell from 10.2% to 8.4%, which can be called a fantastic result. Moreover, they expected a decline to only 9.9%. True, only 1,371,000 new jobs were created outside agriculture, and not 1,490,000, as predicted. But with such an impressive drop in the unemployment rate, few people care about it. Moreover, the average working week has grown from 34.5 hours to 34.6 hours. They waited for a reduction to 34.4 hours. So Americans are now also working harder. In addition, they did not receive less money for this, since the growth rate of the average hourly wage, which should have slowed down from 4.7% to 4.6%, remained unchanged. In fact, the income of employees only grew due to an increase in the length of the working week. So the content of the report of the United States Department of Labor was a pleasant surprise. It is safe to say that the labor market is recovering and does not plan to stop there.

Unemployment rate (United States):

And in theory, after this, nothing could stop the dollar. But after just a few hours, the single European currency quickly won back all its losses and returned to its original values. The reason for such an unexpected turn was the speech of Philip Lane. A member of the executive board of the ECB delivered a presentation on the impact of the coronavirus pandemic. The main topic of the speech was inflation. Particularly on those risks that low inflation carries. Not to mention deflation. The final message of the report was that the ECB should focus on inflation growth to the 2.0% target level. Moreover, if it is necessary, then it is imperative to change the central bank's approach to monetary policy. In fact, this is the second speech by a high-ranking representative of the ECB, in which serious hints are made not only about changing the regulator's policy, but precisely the need to accelerate inflation. In other words, the ECB is preparing the public for a serious reversal, which includes hiking interest rates. And it was precisely this prospect that inspired investors as they began to buy the euro again. So today, market participants will have to weigh what they like better - good macroeconomic data in the United States or the potential for a rise in interest rates in Europe. A kind of push-push. So today we can expect a kind of stagnation. The market is frozen in uncertainty again.

The euro/dollar pair showed high dynamics once again, which caused the dollar to fall to the 1.1800 level, but after that a natural rebound occurred, which returned the quote to the starting point, leaving a V-shaped structure on the market.

If we proceed from the quotes' current location, then we can see low activity, where the confines of 1.1790/1.1865 emerged due to recent price fluctuations.

Considering the trading chart in general terms (daily period), you can see that after the price rebounded from the psychological level of 1.2000, the quote returned to the boundaries of the previous flat, which took place during the last month.

We can assume that the quote will continue to move within the limits of 1.1790/1.1865, where trading forces concentrated within the lower limit of the range is not excluded.

From the point of view of a complex indicator analysis, we see that the indicators of technical instruments on the minute, hourly and daily intervals have a sell signal due to the price moving from the psychological level of 1.2000, as well as being concentrated within the price mark of 1.1800.